abrdn European Logistics Income (LON:ASLI) Has Announced A Dividend Of €0.0122
The board of abrdn European Logistics Income plc (LON:ASLI) has announced that it will pay a dividend of €0.0122 per share on the 22nd of September. The dividend yield will be 6.9% based on this payment which is still above the industry average.
See our latest analysis for abrdn European Logistics Income
abrdn European Logistics Income Might Find It Hard To Continue The Dividend
Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. abrdn European Logistics Income is unprofitable despite paying a dividend, and it is paying out 104% of its free cash flow. This is quite a strong warning sign that the dividend may not be sustainable.
If the trend of the last few years continues, EPS will grow by 9.1% over the next 12 months. While it is good to see income moving in the right direction, it still looks like the company won't achieve profitability. Unless this can be done in short order, the dividend might be difficult to sustain.
abrdn European Logistics Income's Dividend Has Lacked Consistency
abrdn European Logistics Income has been paying dividends for a while, but the track record isn't stellar. This suggests that the dividend might not be the most reliable. Since 2018, the dividend has gone from €0.0311 total annually to €0.0564. This means that it has been growing its distributions at 13% per annum over that time. abrdn European Logistics Income has grown distributions at a rapid rate despite cutting the dividend at least once in the past. Companies that cut once often cut again, so we would be cautious about buying this stock solely for the dividend income.
abrdn European Logistics Income Could Grow Its Dividend
With a relatively unstable dividend, it's even more important to see if earnings per share is growing. We are encouraged to see that abrdn European Logistics Income has grown earnings per share at 9.1% per year over the past five years. Even though the company isn't making a profit, strong earnings growth could turn that around in the near future. Assuming the company can post positive net income numbers soon, it could has the potential to be a decent dividend payer.
abrdn European Logistics Income's Dividend Doesn't Look Sustainable
In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about abrdn European Logistics Income's payments, as there could be some issues with sustaining them into the future. Strong earnings growth means abrdn European Logistics Income has the potential to be a good dividend stock in the future, despite the current payments being at elevated levels. Overall, we don't think this company has the makings of a good income stock.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. Taking the debate a bit further, we've identified 2 warning signs for abrdn European Logistics Income that investors need to be conscious of moving forward. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
