Yahoo Finance Aptitude Software Group (LON:APTD) Will Pay A Dividend Of £0.036
The board of Aptitude Software Group plc (LON:APTD) has announced that it will pay a dividend of £0.036 per share on the 14th of June. This means that the annual payment will be 1.8% of the current stock price, which is in line with the average for the industry.
View our latest analysis for Aptitude Software Group
Aptitude Software Group's Earnings Easily Cover The Distributions
While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible. Before this announcement, Aptitude Software Group was paying out 75% of earnings, but a comparatively small 27% of free cash flows. This leaves plenty of cash for reinvestment into the business.
EPS is set to fall by 6.6% over the next 12 months if recent trends continue. However, if the dividend continues along recent trends, we estimate the payout ratio could reach 81%, meaning that most of the company's earnings is being paid out to shareholders.
Dividend Volatility
The company's dividend history has been marked by instability, with at least one cut in the last 10 years. The annual payment during the last 10 years was £0.125 in 2014, and the most recent fiscal year payment was £0.054. Doing the maths, this is a decline of about 8.0% per year. A company that decreases its dividend over time generally isn't what we are looking for.
Dividend Growth Is Doubtful
With a relatively unstable dividend, and a poor history of shrinking dividends, it's even more important to see if EPS is growing. In the last five years, Aptitude Software Group's earnings per share has shrunk at approximately 6.6% per annum. Declining earnings will inevitably lead to the company paying a lower dividend in line with lower profits.
In Summary
Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. The payments haven't been particularly stable and we don't see huge growth potential, but with the dividend well covered by cash flows it could prove to be reliable over the short term. 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. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Now, if you want to look closer, it would be worth checking out our free research on Aptitude Software Group management tenure, salary, and performance. Is Aptitude Software Group 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.
