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The board of Mensch und Maschine Software SE (ETR:MUM) has announced that it will be paying its dividend of €1.85 on the 13th of May, an increased payment from last year's comparable dividend. This takes the dividend yield to 3.6%, which shareholders will be pleased with.
Our free stock report includes 1 warning sign investors should be aware of before investing in Mensch und Maschine Software. Read for free now.
Mensch und Maschine Software's Projected Earnings Seem Likely To Cover Future Distributions
A big dividend yield for a few years doesn't mean much if it can't be sustained. Based on the last payment, Mensch und Maschine Software's profits didn't cover the dividend, but the company was generating enough cash instead. Healthy cash flows are always a positive sign, especially when they quite easily cover the dividend.
Over the next year, EPS is forecast to expand by 51.4%. If the dividend continues along recent trends, we estimate the payout ratio could reach 81%, which is on the higher side, but certainly still feasible.
View our latest analysis for Mensch und Maschine Software
Mensch und Maschine Software Has A Solid Track Record
The company has an extended history of paying stable dividends. The dividend has gone from an annual total of €0.20 in 2015 to the most recent total annual payment of €1.85. This works out to be a compound annual growth rate (CAGR) of approximately 25% a year over that time. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.
Dividend Growth Could Be Constrained
The company's investors will be pleased to have been receiving dividend income for some time. It's encouraging to see that Mensch und Maschine Software has been growing its earnings per share at 13% a year over the past five years. However, the payout ratio is very high, not leaving much room for growth of the dividend in the future.
Our Thoughts On Mensch und Maschine Software's Dividend
Overall, we always like to see the dividend being raised, but we don't think Mensch und Maschine Software will make a great income stock. The company has been bring in plenty of cash to cover the dividend, but we don't necessarily think that makes it a great dividend stock. This company is not in the top tier of income providing stocks.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've picked out 1 warning sign for Mensch und Maschine Software that investors should know about before committing capital to this stock. Is Mensch und Maschine Software not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
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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.