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Banque Cantonale Vaudoise (VTX:BCVN) is a true Dividend Rock Star. Its yield of 4.6% makes it one of the market’s top dividend payer. In the past ten years, Banque Cantonale Vaudoise has also grown its dividend from CHF30 to CHF35. Below, I have outlined more attractive dividend aspects for Banque Cantonale Vaudoise for income investors who may be interested in new dividend stocks for their portfolio.
What Is A Dividend Rock Star?
It is a stock that pays a reliable and steady dividend over the past decade, at a rate that is competitive relative to the other dividend-paying companies on the market. More specifically:
- It is paying an annual yield above 75% of dividend payers
- It has paid dividend every year without dramatically reducing payout in the past
- Its has increased its dividend per share amount over the past
- It can afford to pay the current rate of dividends from its earnings
- It is able to continue to payout at the current rate in the future
High Yield And Dependable
Banque Cantonale Vaudoise’s dividend yield stands at 4.6%, which is high for Banks stocks. But the real reason Banque Cantonale Vaudoise stands out is because it has a proven track record of continuously paying out this level of dividends, from earnings, to shareholders and can be expected to continue paying in the future. This is a highly desirable trait for a stock holding if you’re investor who wants a robust cash inflow from your portfolio over a long period of time.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. In the case of BCVN it has increased its DPS from CHF30 to CHF35 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. These are all positive signs of a great, reliable dividend stock.
The company currently pays out 86% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect BCVN’s payout to remain around the same level at 86% of its earnings. Assuming a constant share price, this equates to a dividend yield of around 4.8%. Moreover, EPS should increase to CHF41.36.
When assessing the forecast sustainability of a dividend it is also worth considering the cash flow of the business. A business with strong cash flow can sustain a higher divided payout ratio than a company with weak cash flow.
Banque Cantonale Vaudoise ticks all the boxes for what I look for in a dividend stock. If you are looking to build an income focused portfolio, this could be one to include. However, given this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. I’ve put together three pertinent factors you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for BCVN’s future growth? Take a look at our free research report of analyst consensus for BCVN’s outlook.
- Valuation: What is BCVN worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether BCVN is currently mispriced by the market.
- Other Dividend Rockstars: Are there strong dividend payers with better fundamentals out there? Check out our free list of these great stocks here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.