CompuGroup Medical SE KGaA (ETR:COP) Has Announced A Dividend Of €0.50

The board of CompuGroup Medical SE & Co. KGaA (ETR:COP) has announced that it will pay a dividend of €0.50 per share on the 23rd of May. This means the annual payment is 1.0% of the current stock price, which is above the average for the industry.

See our latest analysis for CompuGroup Medical SE KGaA

CompuGroup Medical SE KGaA's Payment Has Solid Earnings Coverage

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. Before making this announcement, CompuGroup Medical SE KGaA was easily earning enough to cover the dividend. This means that most of its earnings are being retained to grow the business.

Over the next year, EPS is forecast to expand by 87.4%. Assuming the dividend continues along recent trends, we think the payout ratio could be 21% by next year, which is in a pretty sustainable range.

CompuGroup Medical SE KGaA Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. The dividend has gone from an annual total of €0.25 in 2013 to the most recent total annual payment of €0.50. This implies that the company grew its distributions at a yearly rate of about 7.2% over that duration. 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. CompuGroup Medical SE KGaA has impressed us by growing EPS at 11% per year over the past five years. CompuGroup Medical SE KGaA definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

We Really Like CompuGroup Medical SE KGaA's Dividend

Overall, we like to see the dividend staying consistent, and we think CompuGroup Medical SE KGaA might even raise payments in the future. 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. Taking the debate a bit further, we've identified 1 warning sign for CompuGroup Medical SE KGaA that investors need to be conscious of moving forward. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.