CEWE Stiftung KGaA (ETR:CWC) Has Announced That It Will Be Increasing Its Dividend To €2.85

The board of CEWE Stiftung & Co. KGaA (ETR:CWC) has announced that the dividend on 9th of June will be increased to €2.85, which will be 9.6% higher than last year's payment of €2.60 which covered the same period. Despite this raise, the dividend yield of 2.6% is only a modest boost to shareholder returns.

Check out our latest analysis for CEWE Stiftung KGaA

CEWE Stiftung KGaA's Future Dividend Projections Appear Well Covered By Earnings

The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock. However, CEWE Stiftung KGaA's earnings easily cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

The next year is set to see EPS grow by 3.4%. If the dividend continues on this path, the payout ratio could be 31% by next year, which we think can be pretty sustainable going forward.

CEWE Stiftung KGaA Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2015, the dividend has gone from €1.50 total annually to €2.60. This means that it has been growing its distributions at 5.7% per annum over that time. Companies like this can be very valuable over the long term, if the decent rate of growth can be maintained.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. CEWE Stiftung KGaA has seen EPS rising for the last three years, at 15% per annum. CEWE Stiftung KGaA definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

CEWE Stiftung KGaA 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. 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. Earnings growth generally bodes well for the future value of company dividend payments. See if the 6 CEWE Stiftung KGaA analysts we track are forecasting continued growth with our free report on analyst estimates for the company. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

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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.