Yahoo Finance Centaur Media (LON:CAU) Has Announced That It Will Be Increasing Its Dividend To £0.012
The board of Centaur Media Plc (LON:CAU) has announced that it will be paying its dividend of £0.012 on the 24th of May, an increased payment from last year's comparable dividend. This takes the dividend yield to 6.1%, which shareholders will be pleased with.
View our latest analysis for Centaur Media
Centaur Media's Dividend Is Well Covered By Earnings
A big dividend yield for a few years doesn't mean much if it can't be sustained. Centaur Media was earning enough to cover the previous dividend, but it was paying out quite a large proportion of its free cash flows. The business is earning enough to make the dividend feasible, but the cash payout ratio of 78% indicates it is more focused on returning cash to shareholders than growing the business.
Over the next year, EPS could expand by 82.2% if recent trends continue. Assuming the dividend continues along recent trends, we think the payout ratio could be 24% by next year, which is in a pretty sustainable range.
Dividend Volatility
The company has a long dividend track record, but it doesn't look great with cuts in the past. There hasn't been much of a change in the dividend over the last 10 years. It's encouraging to see some dividend growth, but the dividend has been cut at least once, and the size of the cut would eliminate most of the growth anyway, which makes this less attractive as an income investment.
The Dividend Looks Likely To Grow
With a relatively unstable dividend, it's even more important to see if earnings per share is growing. It's encouraging to see that Centaur Media has been growing its earnings per share at 82% a year over the past five years. Centaur Media is clearly able to grow rapidly while still returning cash to shareholders, positioning it to become a strong dividend payer in the future.
Our Thoughts On Centaur Media's Dividend
Overall, we always like to see the dividend being raised, but we don't think Centaur Media will make a great income stock. The low payout ratio is a redeeming feature, but generally we are not too happy with the payments Centaur Media has been making. We don't think Centaur Media is a great stock to add to your portfolio if income is your focus.
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 2 warning signs for Centaur Media that investors should know about before committing capital to this stock. 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.
