Compagnie Financière Tradition's (VTX:CFT) Upcoming Dividend Will Be Larger Than Last Year's

The board of Compagnie Financière Tradition SA (VTX:CFT) has announced that it will be paying its dividend of CHF5.50 on the 6th of June, an increased payment from last year's comparable dividend. This will take the annual payment to 4.5% of the stock price, which is above what most companies in the industry pay.

View our latest analysis for Compagnie Financière Tradition

Compagnie Financière Tradition's Earnings Easily Cover The Distributions

A big dividend yield for a few years doesn't mean much if it can't be sustained. Based on the last payment, Compagnie Financière Tradition was quite comfortably earning enough to cover the dividend. This indicates that quite a large proportion of earnings is being invested back into the business.

If the trend of the last few years continues, EPS will grow by 13.1% over the next 12 months. If the dividend continues along recent trends, we estimate the payout ratio will be 44%, which is in the range that makes us comfortable with the sustainability of the dividend.

Compagnie Financière Tradition 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 2013, the annual payment back then was CHF1.87, compared to the most recent full-year payment of CHF5.50. This works out to be a compound annual growth rate (CAGR) of approximately 11% a year over that time. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.

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. Compagnie Financière Tradition has seen EPS rising for the last five years, at 13% per annum. Since earnings per share is growing at an acceptable rate, and the payout policy is balanced, we think the company is positioning itself well to grow earnings and dividends in the future.

We Really Like Compagnie Financière Tradition's Dividend

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. 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. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Now, if you want to look closer, it would be worth checking out our free research on Compagnie Financière Tradition management tenure, salary, and performance. Is Compagnie Financière Tradition not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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