Evergreen International Storage & Transport (TWSE:2607) Is Paying Out Less In Dividends Than Last Year

Evergreen International Storage & Transport Corporation (TWSE:2607) is reducing its dividend from last year's comparable payment to NT$1.10 on the 8th of August. However, the dividend yield of 3.3% still remains in a typical range for the industry.

Check out our latest analysis for Evergreen International Storage & Transport

Evergreen International Storage & Transport's Dividend Is Well Covered By Earnings

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important. Prior to this announcement, Evergreen International Storage & Transport's dividend was comfortably covered by both cash flow and earnings. This indicates that a lot of the earnings are being reinvested into the business, with the aim of fueling growth.

Over the next year, EPS could expand by 26.3% if recent trends continue. 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.

Evergreen International Storage & Transport Has A Solid Track Record

The company has an extended history of paying stable dividends. The dividend has gone from an annual total of NT$0.30 in 2014 to the most recent total annual payment of NT$1.10. This implies that the company grew its distributions at a yearly rate of about 14% over that duration. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Evergreen International Storage & Transport has seen EPS rising for the last five years, at 26% per annum. Evergreen International Storage & Transport is clearly able to grow rapidly while still returning cash to shareholders, positioning it to become a strong dividend payer in the future.

We Really Like Evergreen International Storage & Transport's Dividend

Overall, we think that Evergreen International Storage & Transport could be a great option for a dividend investment, although we would have preferred if the dividend wasn't cut this year. Reducing the amount it is paying as a dividend can protect the company's balance sheet, keeping the dividend sustainable for longer. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. You can also discover whether shareholders are aligned with insider interests by checking our visualisation of insider shareholdings and trades in Evergreen International Storage & Transport stock. Is Evergreen International Storage & Transport not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.