CEWE Stiftung KGaA's (ETR:CWC) Upcoming Dividend Will Be Larger Than Last Year's

The board of CEWE Stiftung & Co. KGaA (ETR:CWC) has announced that it will be paying its dividend of €2.45 on the 12th of June, an increased payment from last year's comparable dividend. 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 Dividend Is Well Covered By Earnings

While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible. However, CEWE Stiftung KGaA's earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.

Over the next year, EPS is forecast to expand by 16.7%. 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 a sustained record of paying dividends with very little fluctuation. The dividend has gone from an annual total of €1.40 in 2013 to the most recent total annual payment of €2.45. This works out to be a compound annual growth rate (CAGR) of approximately 5.8% a year over that time. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.

We Could See CEWE Stiftung KGaA's Dividend Growing

Investors could be attracted to the stock based on the quality of its payment history. We are encouraged to see that CEWE Stiftung KGaA has grown earnings per share at 9.5% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for CEWE Stiftung KGaA's prospects of growing its dividend payments in the future.

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. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. 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. Is CEWE Stiftung KGaA not quite the opportunity you were looking for? Why not check out our selection of top 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.