Multiplan Empreendimentos Imobiliários' (BVMF:MULT3) Dividend Will Be R$0.1548

Multiplan Empreendimentos Imobiliários S.A. (BVMF:MULT3) has announced that it will pay a dividend of R$0.1548 per share on the 31st of March. This takes the annual payment to 4.0% of the current stock price, which unfortunately is below what the industry is paying.

Check out our latest analysis for Multiplan Empreendimentos Imobiliários

Multiplan Empreendimentos Imobiliários' Payment Has Solid Earnings Coverage

The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock. The last dividend was quite easily covered by Multiplan Empreendimentos Imobiliários' earnings. This means that a large portion of its earnings are being retained to grow the business.

Over the next year, EPS is forecast to expand by 17.1%. If the dividend continues along recent trends, we estimate the payout ratio will be 53%, which is in the range that makes us comfortable with the sustainability of the dividend.

Dividend Volatility

While the company has been paying a dividend for a long time, it has cut the dividend at least once in the last 10 years. Since 2014, the annual payment back then was R$0.344, compared to the most recent full-year payment of R$0.993. This implies that the company grew its distributions at a yearly rate of about 11% over that duration. Despite the rapid growth in the dividend over the past number of years, we have seen the payments go down the past as well, so that makes us cautious.

The Dividend Looks Likely To Grow

Given that the dividend has been cut in the past, we need to check if earnings are growing and if that might lead to stronger dividends in the future. Multiplan Empreendimentos Imobiliários has seen EPS rising for the last five years, at 17% per annum. Shareholders are getting plenty of the earnings returned to them, which combined with strong growth makes this quite appealing.

We Really Like Multiplan Empreendimentos Imobiliários' Dividend

Overall, a dividend increase is always good, and we think that Multiplan Empreendimentos Imobiliários is a strong income stock thanks to its track record and growing earnings. Distributions are quite easily covered by earnings, which are also being converted to cash flows. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. As an example, we've identified 2 warning signs for Multiplan Empreendimentos Imobiliários that you should be aware of before investing. Is Multiplan Empreendimentos Imobiliários 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.