EQB (TSE:EQB) Is Increasing Its Dividend To CA$0.42
EQB Inc. (TSE:EQB) has announced that it will be increasing its dividend from last year's comparable payment on the 28th of March to CA$0.42. Despite this raise, the dividend yield of 1.9% is only a modest boost to shareholder returns.
Check out our latest analysis for EQB
EQB's Dividend Forecasted To Be Well Covered By Earnings
If it is predictable over a long period, even low dividend yields can be attractive.
Having distributed dividends for at least 10 years, EQB has a long history of paying out a part of its earnings to shareholders. While past data isn't a guarantee for the future, EQB's latest earnings report puts its payout ratio at 11%, showing that the company can pay out its dividends comfortably.
Looking forward, EPS is forecast to rise by 25.7% over the next 3 years. Analysts forecast the future payout ratio could be 18% over the same time horizon, which is a number we think the company can maintain.
EQB Has A Solid Track Record
The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2014, the dividend has gone from CA$0.30 total annually to CA$1.60. This works out to be a compound annual growth rate (CAGR) of approximately 18% a year over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.
The Dividend Looks Likely To Grow
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. EQB has impressed us by growing EPS at 19% per year over the past five years. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.
EQB Looks Like A Great Dividend Stock
Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All in all, this checks a lot of the boxes we look for when choosing an income stock.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. As an example, we've identified 1 warning sign for EQB that you should be aware of before investing. 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.
