Yahoo Finance Heartland Group Holdings (NZSE:HGH) Is Paying Out Less In Dividends Than Last Year
Heartland Group Holdings Limited (NZSE:HGH) is reducing its dividend from last year's comparable payment to NZ$0.0471 on the 20th of March. This means the annual payment is 9.9% of the current stock price, which is above the average for the industry.
See our latest analysis for Heartland Group Holdings
Heartland Group Holdings' Dividend Forecasted To Be Well Covered By Earnings
If the payments aren't sustainable, a high yield for a few years won't matter that much.
Heartland Group Holdings has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Past distributions do not necessarily guarantee future ones, but Heartland Group Holdings' payout ratio of 84% is a good sign as this means that earnings decently cover dividends.
Over the next 3 years, EPS is forecast to expand by 52.1%. Analyst estimates also show the future payout ratio being 72% in the same 3 years which brings it into quite a comfortable range.
Dividend Volatility
Although the company has a long dividend history, it has been cut at least once in the last 10 years. Since 2014, the dividend has gone from NZ$0.05 total annually to NZ$0.12. This works out to be a compound annual growth rate (CAGR) of approximately 9.1% a year over that time. We like to see dividends have grown at a reasonable rate, but with at least one substantial cut in the payments, we're not certain this dividend stock would be ideal for someone intending to live on the income.
The Dividend's Growth Prospects Are Limited
With a relatively unstable dividend, it's even more important to see if earnings per share is growing. Although it's important to note that Heartland Group Holdings' earnings per share has basically not grown from where it was five years ago, which could erode the purchasing power of the dividend over time.
Our Thoughts On Heartland Group Holdings' Dividend
In summary, dividends being cut isn't ideal, however it can bring the payment into a more sustainable range. The track record isn't great, and the payments are a bit high to be considered sustainable. We would probably look elsewhere for an income investment.
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 1 warning sign for Heartland Group Holdings that investors should know about before committing capital to this stock. Is Heartland Group Holdings 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.
