Logitech International (VTX:LOGN) Will Pay A Larger Dividend Than Last Year At $1.16

Logitech International S.A. (VTX:LOGN) will increase its dividend from last year's comparable payment on the 25th of September to $1.16. This will take the dividend yield to an attractive 1.4%, providing a nice boost to shareholder returns.

View our latest analysis for Logitech International

Logitech International's Earnings Easily Cover The Distributions

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. Before making this announcement, Logitech International was easily earning enough to cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

Looking forward, earnings per share is forecast to rise by 2.0% over the next year. If the dividend continues on this path, the payout ratio could be 28% by next year, which we think can be pretty sustainable going forward.

Logitech International Has A Solid Track Record

The company has an extended history of paying stable dividends. The annual payment during the last 10 years was $0.272 in 2014, and the most recent fiscal year payment was $1.29. This means that it has been growing its distributions at 17% per annum over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

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. Logitech International has seen EPS rising for the last five years, at 23% per annum. A low payout ratio gives the company a lot of flexibility, and growing earnings also make it very easy for it to grow the dividend.

Logitech International 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. Earnings are easily covering distributions, and the company is generating plenty of cash. 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 15 analysts we track are forecasting for Logitech International for free with public analyst estimates for the company. Is Logitech International not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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