Yahoo Finance Why Income Investors Should Have Nokian Renkaat Oyj (HEL:TYRES) In Their Portfolio
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Nokian Renkaat Oyj (HEL:TYRES) is a true Dividend Rock Star. Its yield of 5.8% makes it one of the market's top dividend payer. In the past ten years, Nokian Renkaat Oyj has also grown its dividend from €0.40 to €1.58. Below, I have outlined more attractive dividend aspects for Nokian Renkaat Oyj for income investors who may be interested in new dividend stocks for their portfolio.
Check out our latest analysis for Nokian Renkaat Oyj
What Is A Dividend Rock Star?
It is a stock that pays a reliable and steady dividend over the past decade, at a rate that is competitive relative to the other dividend-paying companies on the market. More specifically:
Its annual yield is among the top 25% of dividend payers
It consistently pays out dividend without missing a payment or significantly cutting payout
Its dividend per share amount has increased over the past
It is able to pay the current rate of dividends from its earnings
It is able to continue to payout at the current rate in the future
High Yield And Dependable
Nokian Renkaat Oyj's yield sits at 5.8%, which is high for Auto Components stocks. But the real reason Nokian Renkaat Oyj stands out is because it has a high chance of being able to continue to pay dividend at this level for years to come, something that is quite desirable if you are looking to create a portfolio that generates a steady stream of income.
If there's one type of stock you want to be reliable, it's dividend stocks and their stable income-generating ability. In the case of TYRES it has increased its DPS from €0.40 to €1.58 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. This is an impressive feat, which makes TYRES a true dividend rockstar.
The current trailing twelve-month payout ratio for the stock is 49%, which means that the dividend is covered by earnings. Going forward, analysts expect TYRES's payout to increase to 73% of its earnings. Assuming a constant share price, this equates to a dividend yield of around 5.9%. However, EPS is forecasted to fall to €2.56 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income.
If you want to dive deeper into the sustainability of a certain payout ratio, you may wish to consider the cash flow of the business. A business with strong cash flow can sustain a higher divided payout ratio than a company with weak cash flow.
Next Steps:
Investors of Nokian Renkaat Oyj can continue to expect strong dividends from the stock. With its favorable dividend characteristics, if high income generation is still the goal for your portfolio, then Nokian Renkaat Oyj is one worth keeping around. However, given this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Below, I've compiled three essential factors you should look at:
Future Outlook: What are well-informed industry analysts predicting for TYRES’s future growth? Take a look at our free research report of analyst consensus for TYRES’s outlook.
Valuation: What is TYRES worth today? Even if the stock is a cash cow, it's not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether TYRES is currently mispriced by the market.
Other Dividend Rockstars: Are there strong dividend payers with better fundamentals out there? Check out our free list of these great stocks here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.