Multiplan Empreendimentos Imobiliários (BVMF:MULT3) Is Due To Pay A Dividend Of R$0.199

Multiplan Empreendimentos Imobiliários S.A.'s (BVMF:MULT3) investors are due to receive a payment of R$0.199 per share on 1st of January. Despite this raise, the dividend yield of 3.9% is only a modest boost to shareholder returns.

Check out our latest analysis for Multiplan Empreendimentos Imobiliários

Multiplan Empreendimentos Imobiliários' Payment Could Potentially Have 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. However, Multiplan Empreendimentos Imobiliários' earnings easily cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

Over the next year, EPS is forecast to expand by 18.1%. If the dividend continues along recent trends, we estimate the payout ratio will be 28%, which is in the range that makes us comfortable with the sustainability of the dividend.

Dividend Volatility

Although the company has a long dividend history, it has been cut at least once in the last 10 years. The dividend has gone from an annual total of R$0.16 in 2014 to the most recent total annual payment of R$0.993. This means that it has been growing its distributions at 20% per annum over that time. 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. It's encouraging to see that Multiplan Empreendimentos Imobiliários has been growing its earnings per share at 22% a year over the past five years. A low payout ratio gives the company a lot of flexibility, and growing earnings also make it very easy for it to grow the dividend.

Multiplan Empreendimentos Imobiliários Looks Like A Great Dividend Stock

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. 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. All in all, this checks a lot of the boxes we look for when choosing an income stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. 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.