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Should You Buy Andritz AG (VIE:ANDR) For Its Dividend?

Thomas Auclair

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 paid a dividend to shareholders. It currently yields 3.0%. Should it have a place in your portfolio? Let’s take a look at Andritz in more detail.

View our latest analysis for Andritz

Here’s how I find good dividend stocks

Whenever I am looking at a potential dividend stock investment, I always check these five metrics:

  • Is their annual yield among the top 25% of dividend payers?
  • Does it consistently pay out dividends without missing a payment of significantly cutting payout?
  • Has dividend per share amount increased over the past?
  • Can it afford to pay the current rate of dividends from its earnings?
  • Will it have the ability to keep paying its dividends going forward?
WBAG:ANDR Historical Dividend Yield September 5th 18

Does Andritz pass our checks?

The company currently pays out 67.5% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting lower payout ratio of 58.3%, leading to a dividend yield of around 3.4%. However, EPS should increase to €2.77, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.

If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Investors have seen reductions in the dividend per share in the past, although, it has picked up again.

Compared to its peers, Andritz has a yield of 3.0%, which is high for Machinery stocks but still below the market’s top dividend payers.

Next Steps:

Keeping in mind the dividend characteristics above, Andritz is definitely worth considering for investors 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. I’ve put together three important aspects you should look at:

  1. 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.
  2. 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.
  3. 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.