CEWE Stiftung KGaA (ETR:CWC) Will Pay A Larger Dividend Than Last Year At €2.60

CEWE Stiftung & Co. KGaA (ETR:CWC) has announced that it will be increasing its dividend from last year's comparable payment on the 10th of June to €2.60. Although the dividend is now higher, the yield is only 2.5%, which is below the industry average.

See our latest analysis for CEWE Stiftung KGaA

CEWE Stiftung KGaA's Earnings Easily Cover The Distributions

Even a low dividend yield can be attractive if it is sustained for years on end. 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 9.5%. If the dividend continues on this path, the payout ratio could be 29% by next year, which we think can be pretty sustainable going forward.

CEWE Stiftung KGaA Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2014, 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. The growth of the dividend has been pretty reliable, so we think this can offer investors some nice additional income in their portfolio.

The Dividend Has Growth Potential

The company's investors will be pleased to have been receiving dividend income for some time. CEWE Stiftung KGaA has impressed us by growing EPS at 9.9% per year over the past five years. 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

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. 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. All of these factors considered, we think this has solid potential as a dividend stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 5 analysts we track are forecasting for CEWE Stiftung KGaA for free with public 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.