Shaw Communications (TSE:SJR.B) Has Affirmed Its Dividend Of CA$0.099

The board of Shaw Communications Inc. (TSE:SJR.B) has announced that it will pay a dividend of CA$0.099 per share on the 30th of August. Based on this payment, the dividend yield will be 3.3%, which is fairly typical for the industry.

See our latest analysis for Shaw Communications

Shaw Communications' Payment Has Solid Earnings Coverage

Unless the payments are sustainable, the dividend yield doesn't mean too much. Based on the last payment, Shaw Communications was quite comfortably earning enough to cover the dividend. This indicates that a lot of the earnings are being reinvested into the business, with the aim of fueling growth.

EPS is set to fall by 15.6% over the next 12 months. If recent patterns in the dividend continue, we could see the payout ratio reaching 80% in the next 12 months, which is on the higher end of the range we would say is sustainable.

Shaw Communications Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. The dividend has gone from CA$0.88 in 2011 to the most recent annual payment of CA$1.19. This implies that the company grew its distributions at a yearly rate of about 3.0% over that duration. While the consistency in the dividend payments is impressive, we think the relatively slow rate of growth is less attractive.

Shaw Communications Could Grow Its Dividend

Investors could be attracted to the stock based on the quality of its payment history. Shaw Communications has seen EPS rising for the last five years, at 8.7% per annum. The company is paying a reasonable amount of earnings to shareholders, and is growing earnings at a decent rate so we think it could be a decent dividend stock.

We Really Like Shaw Communications' Dividend

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. The earnings easily cover the company's distributions, and the company is generating plenty of cash. If earnings do fall over the next 12 months, the dividend could be buffeted a little bit, but we don't think it should cause too much of a problem in the long term. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For instance, we've picked out 1 warning sign for Shaw Communications that investors should take into consideration. We have also put together a list of global stocks with a solid dividend.

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