Yahoo Finance CEWE Stiftung KGaA (ETR:CWC) Is Increasing Its Dividend To €2.60
CEWE Stiftung & Co. KGaA (ETR:CWC) will increase its dividend from last year's comparable payment on the 10th of June to €2.60. Even though the dividend went up, the yield is still quite low at only 2.6%.
See 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 9.5%. Assuming the dividend continues along recent trends, we think the payout ratio could be 29% by next year, which is in a pretty sustainable range.
CEWE Stiftung KGaA Has A Solid Track Record
The company has an extended history of paying stable dividends. The annual payment during the last 10 years was €1.50 in 2014, and the most recent fiscal year payment was €2.60. This implies that the company grew its distributions at a yearly rate of about 5.7% over that duration. Companies like this can be very valuable over the long term, if the decent rate of growth can be maintained.
The Dividend Has Growth Potential
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. We are encouraged to see that CEWE Stiftung KGaA has grown earnings per share at 10.0% per year over the past five years. CEWE Stiftung KGaA definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
CEWE Stiftung KGaA Looks Like A Great Dividend Stock
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. All in all, this checks a lot of the boxes we look for when choosing an income stock.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. 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. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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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.
