Banco Bilbao Vizcaya Argentaria's (BME:BBVA) Upcoming Dividend Will Be Larger Than Last Year's

Banco Bilbao Vizcaya Argentaria, S.A. (BME:BBVA) will increase its dividend from last year's comparable payment on the 10th of April to €0.3159. This takes the annual payment to 5.9% of the current stock price, which is about average for the industry.

Check out our latest analysis for Banco Bilbao Vizcaya Argentaria

Banco Bilbao Vizcaya Argentaria's Dividend Forecasted To Be Well Covered By Earnings

We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue.

Having distributed dividends for at least 10 years, Banco Bilbao Vizcaya Argentaria has a long history of paying out a part of its earnings to shareholders. Based on Banco Bilbao Vizcaya Argentaria's last earnings report, the payout ratio is at a decent 43%, meaning that the company is able to pay out its dividend with a bit of room to spare.

The next 3 years are set to see EPS grow by 8.8%. Analysts forecast the future payout ratio could be 46% over the same time horizon, which is a number we think the company can maintain.

Dividend Volatility

Although the company has a long dividend history, it has been cut at least once in the last 10 years. The annual payment during the last 10 years was €0.20 in 2014, and the most recent fiscal year payment was €0.55. This means that it has been growing its distributions at 11% per annum over that time. Dividends have grown rapidly over this time, but with cuts in the past we are not certain that this stock will be a reliable source of income in the future.

The Dividend Looks Likely To Grow

Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. Banco Bilbao Vizcaya Argentaria has impressed us by growing EPS at 16% per year over the past five years. Earnings are on the uptrend, and it is only paying a small portion of those earnings to shareholders.

Banco Bilbao Vizcaya Argentaria Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that Banco Bilbao Vizcaya Argentaria 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. All in all, this checks a lot of the boxes we look for when choosing an income stock.

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. Just as an example, we've come across 2 warning signs for Banco Bilbao Vizcaya Argentaria you should be aware of, and 1 of them is significant. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.