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Fiskars Oyj Abp (HEL:FSKRS) stock is about to trade ex-dividend in 3 days time. If you purchase the stock on or after the 6th of September, you won't be eligible to receive this dividend, when it is paid on the 16th of September.
Fiskars Oyj Abp's upcoming dividend is €0.27 a share, following on from the last 12 months, when the company distributed a total of €0.54 per share to shareholders. Based on the last year's worth of payments, Fiskars Oyj Abp has a trailing yield of 4.5% on the current stock price of €12.12. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.
View our latest analysis for Fiskars Oyj Abp
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Fiskars Oyj Abp paid out more than half (54%) of its earnings last year, which is a regular payout ratio for most companies. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. It paid out more than half (62%) of its free cash flow in the past year, which is within an average range for most companies.
It's positive to see that Fiskars Oyj Abp's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
When earnings decline, dividend companies become much harder to analyse and own safely. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. That's why it's not ideal to see Fiskars Oyj Abp's earnings per share have been shrinking at 2.6% a year over the previous five years.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the last 10 years, Fiskars Oyj Abp has lifted its dividend by approximately 0.8% a year on average.
The Bottom Line
Is Fiskars Oyj Abp an attractive dividend stock, or better left on the shelf? While earnings per share are shrinking, it's encouraging to see that at least Fiskars Oyj Abp's dividend appears sustainable, with earnings and cashflow payout ratios that are within reasonable bounds. It's not the most attractive proposition from a dividend perspective, and we'd probably give this one a miss for now.