Coca-Cola FEMSA. de's (NYSE:KOF) Upcoming Dividend Will Be Larger Than Last Year's
Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) will increase its dividend from last year's comparable payment on the 13th of November to MX$1.41. This will take the annual payment to 4.6% of the stock price, which is above what most companies in the industry pay.
Check out our latest analysis for Coca-Cola FEMSA. de
Coca-Cola FEMSA. de's Dividend Is Well Covered By Earnings
A big dividend yield for a few years doesn't mean much if it can't be sustained. Prior to this announcement, Coca-Cola FEMSA. de's dividend was comfortably covered by both cash flow and earnings. This indicates that quite a large proportion of earnings is being invested back into the business.
Over the next year, EPS is forecast to expand by 25.2%. If the dividend continues along recent trends, we estimate the payout ratio will be 2.5%, which is in the range that makes us comfortable with the sustainability of the dividend.
Coca-Cola FEMSA. de Has A Solid Track Record
The company has a sustained record of paying dividends with very little fluctuation. Since 2013, the dividend has gone from MX$29.00 total annually to MX$58.00. This implies that the company grew its distributions at a yearly rate of about 7.2% over that duration. Dividends have grown at a reasonable rate over this period, and without any major cuts in the payment over time, we think this is an attractive combination as it provides a nice boost to shareholder returns.
The Dividend Looks Likely To Grow
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. We are encouraged to see that Coca-Cola FEMSA. de has grown earnings per share at 33% per year over the past five years. The company's earnings per share has grown rapidly in recent years, and it has a good balance between reinvesting and paying dividends to shareholders, so we think that Coca-Cola FEMSA. de could prove to be a strong dividend payer.
Coca-Cola FEMSA. de Looks Like A Great Dividend Stock
Overall, a dividend increase is always good, and we think that Coca-Cola FEMSA. de is a strong income stock thanks to its track record and growing earnings. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. 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 14 Coca-Cola FEMSA. de 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.
