Kuehne + Nagel International (VTX:KNIN) Is Increasing Its Dividend To CHF10.00

Kuehne + Nagel International AG (VTX:KNIN) has announced that it will be increasing its dividend on the 9th of May to CHF10.00. This takes the annual payment to 3.7% of the current stock price, which unfortunately is below what the industry is paying.

View our latest analysis for Kuehne + Nagel International

Kuehne + Nagel International's Earnings Easily Cover the Distributions

The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock. Based on the last payment, Kuehne + Nagel International 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.

The next year is set to see EPS grow by 7.6%. If the dividend continues on this path, the payout ratio could be 56% by next year, which we think can be pretty sustainable going forward.

Dividend Volatility

While the company has been paying a dividend for a long time, it has cut the dividend at least once in the last 10 years. The dividend has gone from CHF3.85 in 2012 to the most recent annual payment of CHF10.00. This means that it has been growing its distributions at 10% per annum over that time. Despite the rapid growth in the dividend over the past number of years, we have seen the payments go down the past as well, so that makes us cautious.

The Dividend Looks Likely To Grow

With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. We are encouraged to see that Kuehne + Nagel International has grown earnings per share at 23% per year over the past five years. The company doesn't have any problems growing, despite returning a lot of capital to shareholders, which is a very nice combination for a dividend stock to have.

Kuehne + Nagel 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 of these factors considered, we think this has solid potential as a dividend stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Case in point: We've spotted 2 warning signs for Kuehne + Nagel International (of which 1 is concerning!) you should know about. Is Kuehne + Nagel International not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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