Banco Latinoamericano de Comercio Exterior S. A (NYSE:BLX) Is Paying Out A Dividend Of $0.25
Banco Latinoamericano de Comercio Exterior, S. A.'s (NYSE:BLX) investors are due to receive a payment of $0.25 per share on 30th of November. This means the annual payment is 6.2% of the current stock price, which is above the average for the industry.
Check out our latest analysis for Banco Latinoamericano de Comercio Exterior S. A
Banco Latinoamericano de Comercio Exterior S. A's Dividend Forecasted To Be Well Covered By Earnings
A big dividend yield for a few years doesn't mean much if it can't be sustained.
Banco Latinoamericano de Comercio Exterior S. A 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 Banco Latinoamericano de Comercio Exterior S. A's payout ratio of 45% is a good sign as this means that earnings decently cover dividends.
Over the next year, EPS could expand by 3.3% if recent trends continue. Assuming the dividend continues along recent trends, we think the future payout ratio could be 40% by next year, which is in a pretty sustainable range.
Dividend Volatility
The company's dividend history has been marked by instability, with at least one cut in the last 10 years. The most recent annual payment of $1.00 is about the same as the annual payment 10 years ago. Modest growth in the dividend is good to see, but we think this is offset by historical cuts to the payments. It is hard to live on a dividend income if the company's earnings are not consistent.
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. Earnings has been rising at 3.3% per annum over the last five years, which admittedly is a bit slow. The company has been growing at a pretty soft 3.3% per annum, and is paying out quite a lot of its earnings to shareholders. This could mean the dividend doesn't have the growth potential we look for going into the future.
In Summary
Overall, a consistent dividend is a good thing, and we think that Banco Latinoamericano de Comercio Exterior S. A has the ability to continue this into the future. While the payout ratios are a good sign, we are less enthusiastic about the company's dividend record. This looks like it could be a good dividend stock going forward, but we would note that the payout ratio has been at higher levels in the past so it could happen again.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. 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 Banco Latinoamericano de Comercio Exterior S. A 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.
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