Valora Holding AG (VTX:VALN) is a true Dividend Rock Star. Its yield of 5.8% makes it one of the market’s top dividend payer. In the past ten years, Valora Holding has also grown its dividend from CHF9 to CHF12.5. Below, I have outlined more attractive dividend aspects for Valora Holding for income investors who may be interested in new dividend stocks for their portfolio.

See our latest analysis for Valora Holding

What Is A Dividend Rock Star?

It is a stock that pays a consistent, reliable and competitive dividend over a long period of time, and is expected to continue to pay in the same manner many years to come. More specifically:

• Its annual yield is among the top 25% of dividend payers

• It has paid dividend every year without dramatically reducing payout in the past

• Its dividend per share amount has increased over the past

• It is able to pay the current rate of dividends from its earnings

• It has the ability to keep paying its dividends going forward

High Yield And Dependable

Valora Holding’s yield sits at 5.8%, which is high for Specialty Retail stocks. But the real reason Valora Holding 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.

Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. In the case of VALN it has increased its DPS from CHF9 to CHF12.5 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. These are all positive signs of a great, reliable dividend stock.

The current trailing twelve-month payout ratio for the stock is 87%, meaning the dividend is sufficiently covered by earnings. However, going forward, analysts expect VALN’s payout to fall to 71% of its earnings. Assuming a constant share price, this equates to a dividend yield of 5.9%. However, EPS should increase to CHF16.15, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.

When assessing the forecast sustainability of a dividend it is also worth considering the cash flow of the business. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.