Should Andritz AG (VIE:ANDR) Be Part Of Your Portfolio?
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Dividends play an important role in compounding returns in the long run and end up forming a sizeable part of investment returns. Historically, Andritz AG (VIE:ANDR) has been paying a dividend to shareholders. Today it yields 3.6%. Does Andritz tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis.
View our latest analysis for Andritz
5 checks you should use to assess a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
Does it pay an annual yield higher than 75% of dividend payers?
Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
Has it increased its dividend per share amount over the past?
Does earnings amply cover its dividend payments?
Will it be able to continue to payout at the current rate in the future?
How does Andritz fare?
The current trailing twelve-month payout ratio for the stock is 68%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting lower payout ratio of 55% which, assuming the share price stays the same, leads to a dividend yield of around 4.2%. However, EPS should increase to €2.79, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
When considering the sustainability of dividends, it is also worth checking the cash flow of a company. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.
If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Although ANDR’s per share payments have increased in the past 10 years, it has not been a completely smooth ride. Investors have seen reductions in the dividend per share in the past, although, it has picked up again.
In terms of its peers, Andritz produces a yield of 3.6%, which is high for Machinery stocks but still below the market’s top dividend payers.
Next Steps:
Considering the dividend attributes we analyzed above, Andritz is definitely worth keeping an eye on for someone looking to build a dedicated income portfolio. Given that this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. There are three essential factors you should look at:
Future Outlook: What are well-informed industry analysts predicting for ANDR’s future growth? Take a look at our free research report of analyst consensus for ANDR’s outlook.
Valuation: What is ANDR worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether ANDR is currently mispriced by the market.
Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
