Holcim (VTX:HOLN) Will Pay A Larger Dividend Than Last Year At CHF3.10

Holcim AG's (VTX:HOLN) dividend will be increasing from last year's payment of the same period to CHF3.10 on 22nd of May. This takes the dividend yield to 3.3%, which shareholders will be pleased with.

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Holcim's Payment Could Potentially Have Solid Earnings Coverage

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. The last dividend was quite easily covered by Holcim's earnings. This means that a large portion of its earnings are being retained to grow the business.

The next year is set to see EPS grow by 33.4%. If the dividend continues on this path, the payout ratio could be 47% by next year, which we think can be pretty sustainable going forward.

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Holcim Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. The annual payment during the last 10 years was CHF1.24 in 2015, and the most recent fiscal year payment was CHF3.10. This means that it has been growing its distributions at 9.6% per annum over that time. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.

The Dividend Has Growth Potential

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Holcim has seen EPS rising for the last five years, at 7.6% per annum. Shareholders are getting plenty of the earnings returned to them, which combined with strong growth makes this quite appealing.

Holcim Looks Like A Great Dividend Stock

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.

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. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 19 analysts we track are forecasting for Holcim for free with public analyst estimates for the company. Is Holcim not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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