ATOSS Software (ETR:AOF) Pays Bigger Dividend Than Last Year

ByLance T. Lee

Apr 28, 2022

ATOSS Software AG (ETR:AOF) announced that it would increase its dividend on May 4 to €1.82. Even though the dividend has increased, the yield is still quite low at just 1.3%.

Check out our latest analysis for ATOSS Software

ATOSS Software’s dividend is well covered by earnings

Even a low dividend yield can be attractive if it persists for years. Prior to this announcement, ATOSS Software was paying out 75% of earnings, but a relatively low 57% of free cash flow. This leaves a lot of money to reinvest in the business.

Looking ahead, earnings per share are expected to fall 0.2% over the next year. However, if the dividend continues on recent trends, we estimate the payout ratio could reach 93%, meaning that most of the company’s earnings are paid out to shareholders.

XTRA:AOF Historic Dividend April 28, 2022

ATOSS software has a strong track record

Even over a long history of paying dividends, the company’s distributions have been remarkably stable. Since 2012, the dividend has increased from €0.35 to €1.82. This means that it has increased its distributions by 18% per year during this period. It is good to see that there has been strong growth in dividends and that there has not been a reduction for a long time.

The dividend should increase

Some investors will be eager to buy some of the company’s stock based on its dividend history. We are encouraged to see that ATOSS Software has increased earnings per share by 16% per year over the past five years. The payout ratio is very high, which could mean that the growth rate will slow down in the future, and this could also affect the dividend.

We really like ATOSS Software’s dividend

Overall, a dividend increase is always good, and we believe ATOSS Software is a strong revenue stock thanks to its track record and growing earnings. Profits easily cover company distributions, and the company generates plenty of cash. Note that earnings are expected to fall over the next 12 months, which won’t be a problem if it doesn’t become a trend, but could cause some turbulence over the next year. Considering all of that, it looks like a good dividend opportunity.

Market movements testify to the valuation of a consistent dividend policy over a more unpredictable one. Meanwhile, despite the importance of dividend payments, these are not the only factors our readers should be aware of when evaluating a company. Pushing the debate a little further, we have identified 1 warning sign for ATOSS software that investors should be aware of going forward. If you are a dividend investor, you can also consult our curated list of high yielding dividend stocks.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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