AcadeMedia AB (publ) ‘s The dividend (STO: ACAD) will increase to 1.75 kr on December 7th. This brings the dividend yield from 3.1% to 3.1%, which shareholders will be delighted with.
Check out our latest review for AcadeMedia
AcadeMedia’s income easily covers distributions
If the payments are not sustainable, a high return for a few years will not matter much. Before making this announcement, AcadeMedia was easily earning enough to cover the dividend. As a result, much of what she earned was reinvested in the business.
Going forward, earnings per share are expected to increase 8.7% over the next year. Assuming the dividend continues on recent trends, we think the payout ratio could be 29% by next year, which is in a fairly sustainable range.
AcadeMedia does not have a long payment history
Looking back, the dividend has been stable, but the company has not paid a dividend for a very long time, so we cannot be sure that the dividend will remain stable in all economic environments. The dividend went from 1.25 kr in 2019 to the last annual payment of 1.75 kr. This works out to a compound annual growth rate (CAGR) of around 18% per year over that time period. It’s always nice to see strong dividend growth, but with such a short payment history we wouldn’t be inclined to rely on it until a longer history has been developed.
AcadeMedia could increase its dividend
Investors who have held shares of the company for the past several years will be pleased with the dividend income they have received. We are encouraged to see that AcadeMedia has increased its earnings per share by 8.5% per year over the past five years. A low payout rate and decent growth suggest that the company is reinvesting well and that it also has enough margin to increase the dividend over time.
We really like the AcadeMedia dividend
Overall, a dividend increase is always good, and we think AcadeMedia is a solid income value thanks to its track record and growing profits. Profits easily cover distributions and the company generates a lot of cash. Overall, this ticks a lot of the boxes that we look for when choosing an income stock.
Market movements testify to the high value of a coherent dividend policy compared to a more unpredictable one. Still, there are a host of other factors that investors need to consider, aside from dividend payments, when analyzing a business. As an example, we have identified 2 warning signs for AcadeMedia that you need to know before you invest. Looking for more high yield dividend ideas? Try our organized list of big dividend payers.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in the mentioned stocks.
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