CEWE Stiftung KGaA (ETR:CWC) Is Paying Out A Larger Dividend Than Last Year

The board of CEWE Stiftung & Co. KGaA (ETR:CWC) has announced that it will be increasing its dividend on the 21st of June to €2.35. Based on the announced payment, the dividend yield for the company will be 2.8%, which is fairly typical for the industry.

View our latest analysis for CEWE Stiftung KGaA

CEWE Stiftung KGaA's Payment Has Solid Earnings Coverage

Unless the payments are sustainable, the dividend yield doesn't mean too much. Before making this announcement, CEWE Stiftung KGaA 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.

The next year is set to see EPS grow by 14.9%. If the dividend continues along recent trends, we estimate the payout ratio will be 35%, which is in the range that makes us comfortable with the sustainability of the dividend.

CEWE Stiftung KGaA 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. The dividend has gone from €1.40 in 2012 to the most recent annual payment of €2.35. This implies that the company grew its distributions at a yearly rate of about 5.3% over that duration. The growth of the dividend has been pretty reliable, so we think this can offer investors some nice additional income in their portfolio.

CEWE Stiftung KGaA Could Grow Its Dividend

The company's investors will be pleased to have been receiving dividend income for some time. It's encouraging to see CEWE Stiftung KGaA has been growing its earnings per share at 8.1% a year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.

CEWE Stiftung KGaA Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that CEWE Stiftung KGaA is a strong income stock thanks to its track record and growing earnings. 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.

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. Earnings growth generally bodes well for the future value of company dividend payments. See if the 5 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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