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HORNBACH Holding AG & Co. KGaA (ETR:HBH) will pay a dividend of €2.40 on the 10th of July. Based on this payment, the dividend yield on the company's stock will be 3.1%, which is an attractive boost to shareholder returns.
Check out our latest analysis for HORNBACH Holding KGaA
HORNBACH Holding KGaA's Dividend Is Well Covered By Earnings
A big dividend yield for a few years doesn't mean much if it can't be sustained. Before making this announcement, HORNBACH Holding KGaA was easily earning enough to cover the dividend. 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 46.4% over the next year. If the dividend continues along recent trends, we estimate the payout ratio will be 23%, which is in the range that makes us comfortable with the sustainability of the dividend.
HORNBACH Holding KGaA Doesn't Have A Long Payment History
HORNBACH Holding KGaA's dividend has been pretty stable for a little while now, but we will continue to be cautious until it has been demonstrated for a few more years. Since 2016, the annual payment back then was €1.50, compared to the most recent full-year payment of €2.40. This means that it has been growing its distributions at 6.1% per annum over that time. Investors will likely want to see a longer track record of growth before making decision to add this to their income portfolio.
The Dividend Looks Likely To Grow
The company's investors will be pleased to have been receiving dividend income for some time. It's encouraging to see that HORNBACH Holding KGaA has been growing its earnings per share at 14% a year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for HORNBACH Holding KGaA's prospects of growing its dividend payments in the future.
We Really Like HORNBACH Holding KGaA's Dividend
Overall, we like to see the dividend staying consistent, and we think HORNBACH Holding KGaA might even raise payments in the future. 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. Taking this all into consideration, this looks like it could be a good dividend opportunity.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've picked out 1 warning sign for HORNBACH Holding KGaA that investors should know about before committing capital to this stock. Is HORNBACH Holding KGaA not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.