Addnode Group's (STO:ANOD B) Dividend Will Be Increased To SEK1.15

Addnode Group AB (publ)'s (STO:ANOD B) dividend will be increasing from last year's payment of the same period to SEK1.15 on 14th of May. This takes the annual payment to 1.3% of the current stock price, which unfortunately is below what the industry is paying.

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Addnode Group's Projected Earnings Seem Likely To Cover Future Distributions

Even a low dividend yield can be attractive if it is sustained for years on end. However, prior to this announcement, Addnode Group's dividend was comfortably covered by both cash flow and earnings. This means that most of what the business earns is being used to help it grow.

Over the next year, EPS is forecast to expand by 53.6%. If the dividend continues on this path, the payout ratio could be 27% by next year, which we think can be pretty sustainable going forward.

See our latest analysis for Addnode Group

Dividend Volatility

While the company has been paying a dividend for a long time, it has cut the dividend at least once in the last 10 years. Since 2015, the dividend has gone from SEK0.563 total annually to SEK1.15. This works out to be a compound annual growth rate (CAGR) of approximately 7.4% a year over that time. We have seen cuts in the past, so while the growth looks promising we would be a little bit cautious about its track record.

The Dividend Looks Likely To Grow

Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. We are encouraged to see that Addnode Group has grown earnings per share at 26% per year over the past five years. Earnings per share is growing at a solid clip, and the payout ratio is low which we think is an ideal combination in a dividend stock as the company can quite easily raise the dividend in the future.

Addnode Group Looks Like A Great Dividend Stock

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Earnings growth generally bodes well for the future value of company dividend payments. See if the 4 Addnode Group analysts we track are forecasting continued growth with our free report on analyst estimates for the company . Is Addnode Group not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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