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Over the past 10 years Carnival Corporation & Plc (NYSE:CCL) has grown its dividend payouts from $0.40 to $2. With a market cap of US$36b, Carnival Corporation & pays out 47% of its earnings, leading to a 4.0% yield. Let me elaborate on you why the stock stands out for income investors like myself.
View our latest analysis for Carnival Corporation &
What Is A Dividend Rock Star?
It is a stock that pays a reliable and steady dividend over the past decade, at a rate that is competitive relative to the other dividend-paying companies on the market. More specifically:
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Its annual yield is among the top 25% of dividend payers
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It has paid dividend every year without dramatically reducing payout in the past
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Its dividend per share amount has increased over the past
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It can afford to pay the current rate of dividends from its earnings
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It is able to continue to payout at the current rate in the future
High Yield And Dependable
Carnival Corporation &'s dividend yield stands at 4.0%, which is high for Hospitality stocks. But the real reason Carnival Corporation & stands out is because it has a proven track record of continuously paying out this level of dividends, from earnings, to shareholders and can be expected to continue paying in the future. This is a highly desirable trait for a stock holding if you're investor who wants a robust cash inflow from your portfolio over a long period of time.
If there's one type of stock you want to be reliable, it's dividend stocks and their stable income-generating ability. In the case of CCL it has increased its DPS from $0.40 to $2 in the past 10 years. It has also been paying out dividend consistently during this time, as you'd expect for a company increasing its dividend levels. This is an impressive feat, which makes CCL a true dividend rockstar.
Carnival Corporation & has a trailing twelve-month payout ratio of 47%, meaning the dividend is sufficiently covered by earnings. However, going forward, analysts expect CCL's payout to fall to 41% of its earnings. Assuming a constant share price, this equates to a dividend yield of 4.1%. However, EPS should increase to $4.52, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
When thinking about whether a dividend is sustainable, another factor to consider is the cash flow. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.
Next Steps:
Carnival Corporation & ticks all the boxes for what I look for in a dividend stock. If you are looking to build an income focused portfolio, this could be one to include. However, given this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company's fundamentals and underlying business before making an investment decision. Below, I've compiled three pertinent aspects you should further examine: