Atlas Arteria Ltd (ASX: ALX) shares have been on the slide recently, pushing the company's expected dividend yield well past 9%.
The company's shares have been trending steadily south since about the time the US launched attacks on Iran in late February. There has been no news from the company to explain the steady drift lower.
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Dividend aspiration stated
The good news for shareholders, or shareholders to be, is that the company has signalled its intent to keep dividend payments steady at 40 cents per year.
In releasing its full-year results earlier this year, the company said, "Atlas Arteria continues to target future distributions of at least 40 cents per share, supported by growing free cash flow''.
At the current share price of $4.30, that equates to a hefty 9.3% dividend yield, albeit one which is unfranked.
The dividend is certainly not set in stone, but in releasing the full-year results, the company's Chief Executive Officer, Hugh Wehby, said they were travelling well.
As he said:
2025 was another positive year for Atlas Arteria. We delivered strong revenue growth and steady traffic performance. We continued to build and optimise our businesses to improve safety and customer experience. This performance supports a 40 cents per share distribution for our investors for 2025, in line with guidance. Our refreshed vision – Partnering to deliver world-class road experiences – sharpens our focus. We invest in high-quality partnerships which strengthen our competitive positions and maximise value across our businesses and portfolio. We're focused on building a resilient portfolio for the long term. That starts with getting the most out of the businesses we own – through strong performance and by pursuing value accretive growth opportunities, including preparing for upcoming French concession retenders. We're also actively looking at new opportunities across OECD markets where we see strong fundamentals and the potential to deliver attractive returns for securityholders.
The company's assets include toll road businesses across France, Germany, and the US.
Shares potentially looking cheap
Brokers following the stock also suggest there could be share price upside as well as a strong dividend yield. Of the 10 analysts surveyed by TradingView, the minimum share price target forecast is $4.31, while the highest comes in at $5.56.
The overall rating is neutral, with five of the 10 analysts giving the stock a hold recommendation.
The toll road operator was valued at $6.23 billion at the close of trade on Thursday afternoon.
