HusCompagniet (CPH:HUSCO) will pay a bigger dividend than last year at 7.35 kr

HusCompagniet A/S (CPH:HUSCO) will increase its dividend on April 13 to 7.35 kr. This will raise the dividend yield from 6.6% to 6.6%, giving shareholder returns a nice boost.

Check out our latest analysis for HusCompagniet

HusCompagniet’s dividend is well covered by earnings

While it’s good to have a high dividend yield, we also have to ask ourselves if the payout is sustainable. Prior to this announcement, HusCompagniet’s dividend was comfortably covered by both cash flow and earnings. This indicates that a fairly large proportion of profits are reinvested in the business.

Over the next year, EPS is expected to increase by 22.1%. If the dividend continues to follow recent trends, we estimate the payout ratio to be 41%, which is within the range that allows us to be comfortable with the sustainability of the dividend.

CPSE: HUSCO Historic dividend April 10, 2022

HusCompagniet continues to build its balance sheet

It is not possible for us to make a retrospective judgment solely on the basis of a short payment history. That doesn’t mean the company can’t pay a good dividend, just that we want to wait until it can prove itself.

The dividend should increase

Investors might be drawn to the stock because of the quality of its payment history. HusCompagniet has seen EPS increase over the past five years, at a rate of 20% per year. HusCompagniet is clearly capable of growing rapidly while returning cash to shareholders, which positions it to become a major dividend payer in the future.

We really like the dividend from HusCompagniet

In summary, it is always positive to see the dividend increase, and we are particularly satisfied with its overall sustainability. The company is easily earning enough to cover its dividend payments and it’s good to see that income translate into cash flow. Considering all of that, it looks like a good dividend opportunity.

Companies with a stable dividend policy are likely to enjoy greater investor interest than those that suffer from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, these are not the only factors our readers should be aware of when evaluating a company. Pushing the debate a little further, we have identified 1 warning sign for HusCompagniet that investors should be aware of going forward. Looking for more high yield dividend ideas? Try our collection of strong dividend payers.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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