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If you are an income investor, then Publicis Groupe S.A. (EPA:PUB) should be on your radar. Publicis Groupe S.A. provides marketing, communication, and digital transformation services worldwide. Over the past 10 years, the €11b market cap company has been growing its dividend payments, from €0.60 to €2.12. Currently yielding 4.4%, let's take a closer look at Publicis Groupe's dividend profile.
What Is A Dividend Rock Star?
It is a stock that pays a consistent, reliable and competitive dividend over a long period of time, and is expected to continue to pay in the same manner many years to come. More specifically:
- It is paying an annual yield above 75% of dividend payers
- It has paid dividend every year without dramatically reducing payout in the past
- Its has increased its dividend per share amount over the past
- It is able to pay the current rate of dividends from its earnings
- It has the ability to keep paying its dividends going forward
High Yield And Dependable
Publicis Groupe's yield sits at 4.4%, which is high for Media stocks. But the real reason Publicis Groupe stands out is because it has a high chance of being able to continue to pay dividend at this level for years to come, something that is quite desirable if you are looking to create a portfolio that generates a steady stream of income.
If there's one type of stock you want to be reliable, it's dividend stocks and their stable income-generating ability. PUB has increased its DPS from €0.60 to €2.12 in the past 10 years. It has also been paying out dividend consistently during this time, as you'd expect for a company increasing its dividend levels. These are all positive signs of a great, reliable dividend stock.
The current trailing twelve-month payout ratio for the stock is 53%, which means that the dividend is covered by earnings. In the near future, analysts are predicting lower payout ratio of 47% which, assuming the share price stays the same, leads to a dividend yield of 5.1%. However, EPS should increase to €4.54, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
When considering the sustainability of dividends, it is also worth checking the cash flow of a company. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.
Investors of Publicis Groupe can continue to expect strong dividends from the stock. With its favorable dividend characteristics, if high income generation is still the goal for your portfolio, then Publicis Groupe is one worth keeping around. However, given this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. Below, I've compiled three key factors you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for PUB’s future growth? Take a look at our free research report of analyst consensus for PUB’s outlook.
- Valuation: What is PUB worth today? Even if the stock is a cash cow, it's not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether PUB is currently mispriced by the market.
- Other Dividend Rockstars: Are there strong dividend payers with better fundamentals out there? Check out our free list of these great stocks here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.