Martinrea International's (TSE:MRE) Dividend Will Be CA$0.05
The board of Martinrea International Inc. (TSE:MRE) has announced that it will pay a dividend on the 15th of January, with investors receiving CA$0.05 per share. The dividend yield is 1.6% based on this payment, which is a little bit low compared to the other companies in the industry.
See our latest analysis for Martinrea International
Martinrea International's Dividend Is Well Covered By Earnings
If it is predictable over a long period, even low dividend yields can be attractive. Before making this announcement, Martinrea International was easily earning enough to cover the dividend. This means that most of what the business earns is being used to help it grow.
The next year is set to see EPS grow by 127.1%. If the dividend continues on this path, the payout ratio could be 3.8% by next year, which we think can be pretty sustainable going forward.
Martinrea International Has A Solid Track Record
The company has an extended history of paying stable dividends. The dividend has gone from an annual total of CA$0.12 in 2013 to the most recent total annual payment of CA$0.20. This means that it has been growing its distributions at 5.2% per annum over that time. The growth of the dividend has been pretty reliable, so we think this can offer investors some nice additional income in their portfolio.
Martinrea International May Find It Hard To Grow The Dividend
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Earnings has been rising at 3.9% per annum over the last five years, which admittedly is a bit slow. If Martinrea International is struggling to find viable investments, it always has the option to increase its payout ratio to pay more to shareholders.
Martinrea International Looks Like A Great Dividend Stock
Overall, we like to see the dividend staying consistent, and we think Martinrea International might even raise payments in the future. Distributions are quite easily covered by earnings, which are also being converted to cash flows. 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. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Taking the debate a bit further, we've identified 1 warning sign for Martinrea International that investors need to be conscious of moving forward. Is Martinrea International not quite the opportunity you were looking for? Why not check out our selection of top 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.
