Yahoo Finance Andrew Peller (TSE:ADW.A) Is Increasing Its Dividend To CA$0.061
Andrew Peller Limited (TSE:ADW.A) will increase its dividend on the 7th of January to CA$0.061. This will take the dividend yield from 2.6% to 2.9%, providing a nice boost to shareholder returns.
See our latest analysis for Andrew Peller
Andrew Peller's Payment Has Solid Earnings Coverage
If the payments aren't sustainable, a high yield for a few years won't matter that much. Based on the last payment, Andrew Peller's earnings were much higher than the dividend, but it wasn't converting those earnings into cash flow. No cash flows could definitely make returning cash to shareholders difficult, or at least mean the balance sheet will come under pressure.
Over the next year, EPS is forecast to expand by 31.7%. Assuming the dividend continues along recent trends, we think the payout ratio could be 42% by next year, which is in a pretty sustainable range.
Andrew Peller Has A Solid Track Record
The company has a sustained record of paying dividends with very little fluctuation. The dividend has gone from CA$0.11 in 2011 to the most recent annual payment of CA$0.22. This works out to be a compound annual growth rate (CAGR) of approximately 7.1% a year over that time. Companies like this can be very valuable over the long term, if the decent rate of growth can be maintained.
Andrew Peller May Find It Hard To Grow The Dividend
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. However, things aren't all that rosy. Andrew Peller hasn't seen much change in its earnings per share over the last five years.
Our Thoughts On Andrew Peller's Dividend
In summary, while it's always good to see the dividend being raised, we don't think Andrew Peller's payments are rock solid. While Andrew Peller is earning enough to cover the payments, the cash flows are lacking. We would probably look elsewhere for an income investment.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Just as an example, we've come across 4 warning signs for Andrew Peller you should be aware of, and 2 of them are concerning. If you are a dividend investor, you might also want to look at our curated list of high performing dividend stock.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
