CEWE Stiftung KGaA's (ETR:CWC) Upcoming Dividend Will Be Larger Than Last Year's
CEWE Stiftung & Co. KGaA (ETR:CWC) has announced that it will be increasing its dividend from last year's comparable payment on the 10th of June to €2.60. Although the dividend is now higher, the yield is only 2.5%, which is below the industry average.
View our latest analysis for CEWE Stiftung KGaA
CEWE Stiftung KGaA's Payment Has Solid Earnings Coverage
The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock. However, prior to this announcement, CEWE Stiftung KGaA's dividend was comfortably covered by both cash flow and earnings. This means that most of what the business earns is being used to help it grow.
Over the next year, EPS is forecast to expand by 7.5%. If the dividend continues along recent trends, we estimate the payout ratio will be 30%, which is in the range that makes us comfortable with the sustainability of the dividend.
CEWE Stiftung KGaA Has A Solid Track Record
The company has an extended history of paying stable dividends. The dividend has gone from an annual total of €1.45 in 2014 to the most recent total annual payment of €2.60. This works out to be a compound annual growth rate (CAGR) of approximately 6.0% a year over that time. Companies like this can be very valuable over the long term, if the decent rate of growth can be maintained.
We Could See CEWE Stiftung KGaA's Dividend Growing
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. CEWE Stiftung KGaA has seen EPS rising for the last five years, at 9.9% per annum. CEWE Stiftung KGaA definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
We Really Like CEWE Stiftung KGaA's Dividend
Overall, a dividend increase is always good, and we think that CEWE Stiftung KGaA is a strong income stock thanks to its track record and growing earnings. Distributions are quite easily covered by earnings, which are also being converted to cash flows. Taking this all into consideration, this looks like it could be a good dividend opportunity.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Earnings growth generally bodes well for the future value of company dividend payments. See if the 5 CEWE Stiftung KGaA analysts we track are forecasting continued growth with our free report on analyst estimates for the company. If you are a dividend investor, you might also want to look at our curated list of high yield 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.
