Yahoo Finance Dusk Group (ASX:DSK) Is Paying Out Less In Dividends Than Last Year
Dusk Group Limited's (ASX:DSK) dividend is being reduced from last year's payment covering the same period to A$0.025 on the 26th of March. Despite the cut, the dividend yield of 6.0% will still be comparable to other companies in the industry.
Check out our latest analysis for Dusk Group
Dusk Group's Earnings Easily Cover The Distributions
We like a dividend to be consistent over the long term, so checking whether it is sustainable is important. Based on the last payment, Dusk Group was quite comfortably earning enough to cover the dividend. This indicates that quite a large proportion of earnings is being invested back into the business.
The next year is set to see EPS grow by 77.3%. If the dividend continues along recent trends, we estimate the payout ratio will be 25%, which is in the range that makes us comfortable with the sustainability of the dividend.
Dusk Group's Dividend Has Lacked Consistency
Even in its short history, we have seen the dividend cut. Since 2021, the dividend has gone from A$0.30 total annually to A$0.05. This works out to a decline of approximately 83% over that time. A company that decreases its dividend over time generally isn't what we are looking for.
The Dividend Looks Likely To Grow
Given that the track record hasn't been stellar, we really want to see earnings per share growing over time. We are encouraged to see that Dusk Group has grown earnings per share at 18% per year over the past five years. The company is paying a reasonable amount of earnings to shareholders, and is growing earnings at a decent rate so we think it could be a decent dividend stock.
We Really Like Dusk Group's Dividend
It is generally not great to see the dividend being cut, but we don't think this should happen much if at all in the future given that Dusk Group has the makings of a solid income stock moving forward. The cut will allow the company to continue paying out the dividend without putting the balance sheet under pressure, which means that it could remain sustainable for longer. Taking this all into consideration, this looks like it could be a good dividend opportunity.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. For instance, we've picked out 3 warning signs for Dusk Group that investors should take into consideration. If you are a dividend investor, you might also want to look at our curated list of high yield 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.
