Seanergy Maritime Holdings' (NASDAQ:SHIP) Upcoming Dividend Will Be Larger Than Last Year's

Seanergy Maritime Holdings Corp.'s (NASDAQ:SHIP) dividend will be increasing from last year's payment of the same period to $0.25 on 10th of October. Based on this payment, the dividend yield for the company will be 9.9%, which is fairly typical for the industry.

See our latest analysis for Seanergy Maritime Holdings

Seanergy Maritime Holdings' Future Dividend Projections Appear Well Covered By Earnings

Solid dividend yields are great, but they only really help us if the payment is sustainable. However, based ont he last payment, Seanergy Maritime Holdings was earning enough to cover the dividend pretty comfortably. However, with more than 75% of free cash flow being paid out to shareholders, future growth could potentially be constrained.

EPS is set to fall by 7.6% over the next 12 months. If the dividend continues along the path it has been on recently, we estimate the payout ratio could be 41%, which is comfortable for the company to continue in the future.

Seanergy Maritime Holdings' Dividend Has Lacked Consistency

The track record isn't the longest, but we are already seeing a bit of instability in the payments. Since 2021, the annual payment back then was $1.00, compared to the most recent full-year payment of $1.13. This implies that the company grew its distributions at a yearly rate of about 4.0% over that duration. We're glad to see the dividend has risen, but with a limited rate of growth and fluctuations in the payments the total shareholder return may be limited.

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. We are encouraged to see that Seanergy Maritime Holdings has grown earnings per share at 102% per year over the past five years. A low payout ratio gives the company a lot of flexibility, and growing earnings also make it very easy for it to grow the dividend.

Our Thoughts On Seanergy Maritime Holdings' Dividend

Overall, we always like to see the dividend being raised, but we don't think Seanergy Maritime Holdings will make a great income stock. The company hasn't been paying a very consistent dividend over time, despite only paying out a small portion of earnings. Overall, we don't think this company has the makings of a good income stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. For instance, we've picked out 2 warning signs for Seanergy Maritime Holdings that investors should take into consideration. Is Seanergy Maritime Holdings 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.