Airtac International Group (TWSE:1590) Will Pay A Larger Dividend Than Last Year At NT$17.68

The board of Airtac International Group (TWSE:1590) has announced that it will be paying its dividend of NT$17.68 on the 30th of October, an increased payment from last year's comparable dividend. Even though the dividend went up, the yield is still quite low at only 1.7%.

View our latest analysis for Airtac International Group

Airtac International Group's Dividend Is Well Covered By Earnings

It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable. The last dividend was quite easily covered by Airtac International Group's earnings. This indicates that quite a large proportion of earnings is being invested back into the business.

The next year is set to see EPS grow by 51.4%. If the dividend continues on this path, the payout ratio could be 37% by next year, which we think can be pretty sustainable going forward.

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 2014, the dividend has gone from NT$3.62 total annually to NT$17.37. This implies that the company grew its distributions at a yearly rate of about 17% over that duration. Despite the rapid growth in the dividend over the past number of years, we have seen the payments go down the past as well, so that makes us cautious.

The Dividend Looks Likely To Grow

Given that the dividend has been cut in the past, we need to check if earnings are growing and if that might lead to stronger dividends in the future. Airtac International Group has impressed us by growing EPS at 21% per year over the past five years. The company's earnings per share has grown rapidly in recent years, and it has a good balance between reinvesting and paying dividends to shareholders, so we think that Airtac International Group could prove to be a strong dividend payer.

Airtac International 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. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. Earnings growth generally bodes well for the future value of company dividend payments. See if the 15 Airtac International Group analysts we track are forecasting continued growth with our free report on analyst estimates for the company. Is Airtac International Group not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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