The dividend Paid By BTS Group (STO: BTS B) Is Higher Than In Previous Years. On November 18, BTS Group AB (publ) (STO: BTS B) shareholders will receive SEK2.40 in dividends, an increase over the previous year’s payment of SEK2.20. That amounts to an annual payment of 1.6% of the stock price, which is far less than similar companies on the market are offering.
BTS Group’s Earnings Easily Cover The Distributions
Increasing the yield would be great, but we need to make sure that doing so won’t put undue pressure on the company’s finances. BTS Group had more than enough income to cover the dividend prior to making this declaration.
As a result, the majority of the company’s profits are being reinvested in the company. In the coming year, analysts anticipate a 30.4% increase in earnings per share. We think a dividend payout ratio of 31% next year is reasonable if it continues on its current trajectory.
The dividend has been paid by the corporation for a long time, however, it has been reduced at least once in the past decade. The dividend has increased from SEK1.60 per share per year in 2012 to SEK4.80 per share per year at the present time.
To put it another way, this amounts to an average annual growth rate (CAGR) of about 12% for that time frame. In spite of the quick dividend growth throughout this period, the history of dividend reduction makes it difficult to confidently predict the stock’s continued ability to serve as a sustainable income source.
The Dividend Looks Likely To Grow
Given the volatility of the dividend, it is all the more crucial to assess whether or not earnings per share are increasing, which could indicate future dividend growth. We are heartened by BTS Group’s 23% annual increase in earnings per share over the past five years. With a low payout ratio, the corporation has plenty of room to manoeuvre, and it can easily increase its dividend as profits rise.
BTS Group Looks Like A Great Dividend Stock
In general, dividend increases are welcome, and we view BTS Group as a solid income stock because of its proven track record and expanding profits. It’s encouraging to see that the company’s success is translating into cash flow sufficient to cover dividend payments.
In general, this has many of the qualities we want in a dividend investment, therefore we’re happy to report that it meets our criteria. The fluctuating value of the market is evidence of the importance investors place on a stable dividend policy.
It’s true that dividends are an important element of a company’s financial picture, but there are many other factors that investors should take into account as well. You can see if management is risking their own money by looking at insider shareholdings in BTS Group stock.