Yahoo Finance Van Lanschot Kempen (AMS:VLK) Will Pay A Dividend Of €2.00
Van Lanschot Kempen NV (AMS:VLK) will pay a dividend of €2.00 on the 4th of June. This makes the dividend yield 5.7%, which is above the industry average.
Check out our latest analysis for Van Lanschot Kempen
Van Lanschot Kempen's Earnings Will Easily Cover The Distributions
If the payments aren't sustainable, a high yield for a few years won't matter that much.
Having paid out dividends for only 3 years, Van Lanschot Kempen does not have much of a history being a dividend paying company. Diving into the company's earnings report, the payout ratio is set at 88%, which is a decent ratio of dividend payout to earnings, and may sustain future dividends if the company stays at its current trend.
Over the next 3 years, EPS is forecast to expand by 51.3%. The future payout ratio over that same time horizon is estimated by analysts to be 86% which is a bit high but can definitely be sustainable.
Van Lanschot Kempen Doesn't Have A Long Payment History
The dividend has been pretty stable looking back, but the company hasn't been paying one for very long. This makes it tough to judge how it would fare through a full economic cycle. The annual payment during the last 3 years was €0.70 in 2021, and the most recent fiscal year payment was €1.75. This means that it has been growing its distributions at 36% per annum over that time. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.
The Dividend Has Limited Growth Potential
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Unfortunately things aren't as good as they seem. Over the past five years, it looks as though Van Lanschot Kempen's EPS has declined at around 57% a year. A sharp decline in earnings per share is not great from from a dividend perspective. Even conservative payout ratios can come under pressure if earnings fall far enough. Over the next year, however, earnings are actually predicted to rise, but we would still be cautious until a track record of earnings growth can be built.
The Dividend Could Prove To Be Unreliable
In summary, while it's always good to see the dividend being raised, we don't think Van Lanschot Kempen's payments are rock solid. The payments are bit high to be considered sustainable, and the track record isn't the best. Overall, we don't think this company has the makings of a good income stock.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've picked out 3 warning signs for Van Lanschot Kempen that investors should know about before committing capital to this stock. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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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.
