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Scout24 (ETR:G24) Is Increasing Its Dividend To €1.00

Scout24 SE (ETR:G24) has announced that it will be increasing its dividend from last year's comparable payment on the 27th of June to €1.00. This takes the dividend yield to 1.7%, which shareholders will be pleased with.

Check out our latest analysis for Scout24

Scout24's Earnings Easily Cover The Distributions

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. Based on the last payment, Scout24 was quite comfortably earning enough to cover the dividend. This means that a large portion of its earnings are being retained to grow the business.

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The next year is set to see EPS grow by 71.3%. If the dividend continues along recent trends, we estimate the payout ratio will be 41%, which is in the range that makes us comfortable with the sustainability of the dividend.

historic-dividend
historic-dividend

Scout24 Doesn't Have A Long Payment History

It is great to see that Scout24 has been paying a stable dividend for a number of years now, however we want to be a bit cautious about whether this will remain true through a full economic cycle. The dividend has gone from an annual total of €0.30 in 2017 to the most recent total annual payment of €1.00. This means that it has been growing its distributions at 22% per annum over that time. Scout24 has been growing its dividend quite rapidly, which is exciting. However, the short payment history makes us question whether this performance will persist across a full market cycle.

Scout24 Could Grow Its Dividend

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Scout24 has seen EPS rising for the last five years, at 9.8% per annum. Shareholders are getting plenty of the earnings returned to them, which combined with strong growth makes this quite appealing.

We Really Like Scout24's Dividend

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. As an example, we've identified 1 warning sign for Scout24 that you should be aware of before investing. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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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