Stock Analysis

EQB (TSE:EQB) Will Pay A Larger Dividend Than Last Year At CA$0.42

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EQB Inc. (TSE:EQB) will increase its dividend from last year's comparable payment on the 28th of March to CA$0.42. Although the dividend is now higher, the yield is only 1.9%, which is below the industry average.

See our latest analysis for EQB

EQB's Dividend Forecasted To Be Well Covered By Earnings

If it is predictable over a long period, even low dividend yields can be attractive.

EQB has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. While past data isn't a guarantee for the future, EQB's latest earnings report puts its payout ratio at 11%, showing that the company can pay out its dividends comfortably.

Looking forward, EPS is forecast to rise by 25.7% over the next 3 years. The future payout ratio could be 18% over that time period, according to analyst estimates, which is a good look for the future of the dividend.

TSX:EQB Historic Dividend March 5th 2024

EQB Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2014, the annual payment back then was CA$0.30, compared to the most recent full-year payment of CA$1.68. This means that it has been growing its distributions at 19% per annum over that time. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. EQB has impressed us by growing EPS at 19% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for EQB's prospects of growing its dividend payments in the future.

We Really Like EQB's Dividend

Overall, a dividend increase is always good, and we think that EQB 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 of these factors considered, we think this has solid potential as a dividend 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. For example, we've picked out 1 warning sign for EQB that investors should know about before committing capital to this stock. Is EQB 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.