Should You Buy AT & S Austria Technologie & Systemtechnik Aktiengesellschaft (VIE:ATS) For Its Upcoming Dividend In 4 Days?
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
Readers hoping to buy AT & S Austria Technologie & Systemtechnik Aktiengesellschaft (VIE:ATS) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. If you purchase the stock on or after the 23rd of July, you won't be eligible to receive this dividend, when it is paid on the 25th of July.
AT & S Austria Technologie & Systemtechnik's next dividend payment will be €0.60 per share. Last year, in total, the company distributed €0.60 to shareholders. Calculating the last year's worth of payments shows that AT & S Austria Technologie & Systemtechnik has a trailing yield of 4.3% on the current share price of €14. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. As a result, readers should always check whether AT & S Austria Technologie & Systemtechnik has been able to grow its dividends, or if the dividend might be cut.
Check out our latest analysis for AT & S Austria Technologie & Systemtechnik
Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. That's why it's good to see AT & S Austria Technologie & Systemtechnik paying out a modest 29% of its earnings. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. Fortunately, it paid out only 32% of its free cash flow in the past year.
It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. Fortunately for readers, AT & S Austria Technologie & Systemtechnik's earnings per share have been growing at 11% a year for the past five years.
Earnings per share are growing rapidly and the company is keeping more than half of its earnings within the business; an attractive combination which could suggest the company is focused on reinvesting to grow earnings further. This will make it easier to fund future growth efforts and we think this is an attractive combination - plus the dividend can always be increased later.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. AT & S Austria Technologie & Systemtechnik has delivered an average of 13% per year annual increase in its dividend, based on the past 10 years of dividend payments. It's exciting to see that both earnings and dividends per share have grown rapidly over the past few years.
The Bottom Line
Is AT & S Austria Technologie & Systemtechnik worth buying for its dividend? AT & S Austria Technologie & Systemtechnik has grown its earnings per share while simultaneously reinvesting in the business. Unfortunately it's cut the dividend at least once in the past ten years, but the conservative payout ratio makes the current dividend look sustainable. It's a promising combination that should mark this company worthy of closer attention.
Curious what other investors think of AT & S Austria Technologie & Systemtechnik? See what analysts are forecasting, with this visualisation of its historical and future estimated earnings and cash flow .
A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising dividend stocks with a greater than 2% yield and an upcoming dividend.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
