Bucher Industries' (VTX:BUCN) Upcoming Dividend Will Be Larger Than Last Year's

Bucher Industries AG (VTX:BUCN) has announced that it will be increasing its dividend on the 20th of April to CHF9.50. Based on the announced payment, the dividend yield for the company will be 2.6%, which is fairly typical for the industry.

View our latest analysis for Bucher Industries

Bucher Industries' Earnings Easily Cover the Distributions

We aren't too impressed by dividend yields unless they can be sustained over time. However, Bucher Industries' earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.

Looking forward, earnings per share is forecast to rise by 7.7% over the next year. If the dividend continues on this path, the payout ratio could be 36% by next year, which we think can be pretty sustainable going forward.

Bucher Industries 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. The dividend has gone from CHF4.00 in 2012 to the most recent annual payment of CHF9.50. This means that it has been growing its distributions at 9.0% per annum over that time. The growth of the dividend has been pretty reliable, so we think this can offer investors some nice additional income in their portfolio.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Bucher Industries has seen EPS rising for the last five years, at 17% per annum. Bucher Industries definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

We Really Like Bucher Industries' Dividend

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. Taking this all into consideration, this looks like it could be a good dividend opportunity.

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 instance, we've picked out 1 warning sign for Bucher Industries that investors should take into consideration. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.