Quebecor (TSE:QBR.A) Will Pay A Larger Dividend Than Last Year At CA$0.35

Quebecor Inc.'s (TSE:QBR.A) periodic dividend will be increasing on the 8th of April to CA$0.35, with investors receiving 7.7% more than last year's CA$0.325. This makes the dividend yield about the same as the industry average at 3.8%.

View our latest analysis for Quebecor

Quebecor's Future Dividend Projections Appear Well Covered By Earnings

While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible. The last dividend was quite easily covered by Quebecor's earnings. This means that a large portion of its earnings are being retained to grow the business.

Over the next year, EPS could expand by 8.2% if recent trends continue. If the dividend continues on this path, the payout ratio could be 49% by next year, which we think can be pretty sustainable going forward.

Quebecor Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2015, the dividend has gone from CA$0.05 total annually to CA$1.30. This works out to be a compound annual growth rate (CAGR) of approximately 39% a year over that time. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.

We Could See Quebecor's Dividend Growing

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Quebecor has impressed us by growing EPS at 8.2% per year over the past five years. Shareholders are getting plenty of the earnings returned to them, which combined with strong growth makes this quite appealing.

Quebecor Looks Like A Great Dividend Stock

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All of these factors considered, we think this has solid potential as a dividend stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. To that end, Quebecor has 2 warning signs (and 1 which is a bit concerning) we think you should know about. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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