The board of CEWE Stiftung & Co. KGaA (ETR:CWC) has announced that it will be increasing its dividend by 4.3% on the 12th of June to €2.45, up from last year's comparable payment of €2.35. Despite this raise, the dividend yield of 2.5% is only a modest boost to shareholder returns.
View our latest analysis for CEWE Stiftung KGaA
CEWE Stiftung KGaA's Dividend Is Well Covered By Earnings
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. As a result, a large proportion of what it earned was being reinvested back into the business.
The next year is set to see EPS grow by 16.0%. If the dividend continues along recent trends, we estimate the payout ratio will be 33%, which is in the range that makes us comfortable with the sustainability of the dividend.
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 dividend has gone from an annual total of €1.40 in 2013 to the most recent total annual payment of €2.35. This means that it has been growing its distributions at 5.3% 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.
The Dividend Looks Likely To Grow
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. 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. With a decent amount of growth and a low payout ratio, we think this bodes well for CEWE Stiftung KGaA's prospects of growing its dividend payments in the future.
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. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. 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.