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The board of CEWE Stiftung & Co. KGaA (ETR:CWC) has announced that it will be paying its dividend of €2.85 on the 9th 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 2.9%.
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CEWE Stiftung KGaA's Projected Earnings Seem Likely To Cover Future Distributions
Even a low dividend yield can be attractive if it is sustained for years on end. However, CEWE Stiftung KGaA's earnings easily 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 14.0%. If the dividend continues on this path, the payout ratio could be 30% by next year, which we think can be pretty sustainable going forward.
Check out our latest analysis for CEWE Stiftung KGaA
CEWE Stiftung KGaA Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. The annual payment during the last 10 years was €1.50 in 2015, and the most recent fiscal year payment was €2.85. This works out to be a compound annual growth rate (CAGR) of approximately 6.6% a year over that time. Companies like this can be very valuable over the long term, if the decent rate of growth can be maintained.
The Dividend Looks Likely To Grow
The company's investors will be pleased to have been receiving dividend income for some time. CEWE Stiftung KGaA has impressed us by growing EPS at 15% 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.
We Really Like CEWE Stiftung KGaA's Dividend
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. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Earnings growth generally bodes well for the future value of company dividend payments. See if the 6 CEWE Stiftung KGaA analysts we track are forecasting continued growth with our free report on analyst estimates for the company. Is CEWE Stiftung KGaA 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.