Autoscope Technologies' (NASDAQ:AATC) Dividend Will Be US$0.12

Autoscope Technologies Corporation's (NASDAQ:AATC) investors are due to receive a payment of US$0.12 per share on 30th of May. The dividend yield will be 8.3% based on this payment which is still above the industry average.

View our latest analysis for Autoscope Technologies

Autoscope Technologies' Payment Has Solid Earnings Coverage

If the payments aren't sustainable, a high yield for a few years won't matter that much. The last dividend made up quite a large portion of free cash flows, and this was made worse by the lack of free cash flows. Generally, we think that this would be a risky long term practice.

Over the next year, EPS could expand by 25.7% if the company continues along the path it has been on recently. If recent patterns in the dividend continue, the payout ratio in 12 months could be 90% which is a bit high but can definitely be sustainable.

Autoscope Technologies Is Still Building Its Track Record

Without a track record of dividend payments, we can't make a judgement on how stable it has been. This doesn't mean that the company can't pay a good dividend, but just that we want to wait until it can prove itself.

Autoscope Technologies Might Find It Hard To Grow Its Dividend

The company's investors will be pleased to have been receiving dividend income for some time. Autoscope Technologies has seen EPS rising for the last five years, at 26% per annum. Fast growing earnings are great, but this can rarely be sustained without some reinvestment into the business, which Autoscope Technologies hasn't been doing.

Autoscope Technologies' Dividend Doesn't Look Sustainable

In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about Autoscope Technologies' payments, as there could be some issues with sustaining them into the future. In general, the distributions are a little bit higher than we would like, but we can't ignore the fact the quickly growing earnings gives this stock great potential in the future. We don't think Autoscope Technologies is a great stock to add to your portfolio if income is your focus.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For instance, we've picked out 3 warning signs for Autoscope Technologies that investors should take into consideration. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.