Centaur Media (LON:CAU) Is Increasing Its Dividend To £0.006
Centaur Media Plc (LON:CAU) will increase its dividend from last year's comparable payment on the 20th of October to £0.006. This makes the dividend yield about the same as the industry average at 2.6%.
View our latest analysis for Centaur Media
Centaur Media Doesn't Earn Enough To Cover Its Payments
While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible. The last dividend was quite easily covered by Centaur Media's earnings. This indicates that a lot of the earnings are being reinvested into the business, with the aim of fueling growth.
Earnings per share is forecast to rise by 34.2% over the next year. If the dividend continues on its recent course, the payout ratio in 12 months could be 152%, which is a bit high and could start applying pressure to the balance sheet.
Dividend Volatility
The company has a long dividend track record, but it doesn't look great with cuts in the past. The annual payment during the last 10 years was £0.0225 in 2013, and the most recent fiscal year payment was £0.012. This works out to be a decline of approximately 6.1% per year over that time. Declining dividends isn't generally what we look for as they can indicate that the company is running into some challenges.
The Dividend Looks Likely To Grow
Given that dividend payments have been shrinking like a glacier in a warming world, we need to check if there are some bright spots on the horizon. Centaur Media has seen EPS rising for the last five years, at 73% per annum. The company doesn't have any problems growing, despite returning a lot of capital to shareholders, which is a very nice combination for a dividend stock to have.
We Really Like Centaur Media's Dividend
Overall, a dividend increase is always good, and we think that Centaur Media is a strong income stock thanks to its track record and growing earnings. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All in all, this checks a lot of the boxes we look for when choosing an income stock.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For instance, we've picked out 2 warning signs for Centaur Media that investors should take into consideration. Is Centaur Media 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.
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