The board of CEWE Stiftung & Co. KGaA (ETR:CWC) has announced that it will be paying its dividend of €2.45 on the 13th of June, an increased payment from last year's comparable dividend. Even though the dividend went up, the yield is still quite low at only 2.6%.
View our latest analysis for CEWE Stiftung KGaA
CEWE Stiftung KGaA's Payment Has Solid Earnings Coverage
Even a low dividend yield can be attractive if it is sustained for years on end. 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.
Looking forward, earnings per share is forecast to rise by 15.9% over the next year. If the dividend continues on this path, the payout ratio could be 33% by next year, which we think can be pretty sustainable going forward.
CEWE Stiftung KGaA 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. The dividend has gone from an annual total of €1.40 in 2013 to the most recent total annual payment of €2.45. This means that it has been growing its distributions at 5.8% per annum over that time. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.
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. It's encouraging to see that CEWE Stiftung KGaA has been growing its earnings per share at 12% a 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, 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 of these factors considered, we think this has solid potential as a dividend stock.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 5 analysts we track are forecasting for CEWE Stiftung KGaA for free with public 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.