Miquel y Costas & Miquel (BME:MCM) Will Pay A Dividend Of €0.0851

The board of Miquel y Costas & Miquel, S.A. (BME:MCM) has announced that it will pay a dividend on the 17th of October, with investors receiving €0.0851 per share. This takes the annual payment to 3.7% of the current stock price, which is about average for the industry.

View our latest analysis for Miquel y Costas & Miquel

Miquel y Costas & Miquel's Future Dividend Projections Appear Well Covered By Earnings

We aren't too impressed by dividend yields unless they can be sustained over time. Before making this announcement, Miquel y Costas & Miquel was easily earning enough to cover the dividend. This means that most of what the business earns is being used to help it grow.

If the trend of the last few years continues, EPS will grow by 5.7% over the next 12 months. If the dividend continues on this path, the payout ratio could be 33% by next year, which we think can be pretty sustainable going forward.

Dividend Volatility

The company's dividend history has been marked by instability, with at least one cut in the last 10 years. The annual payment during the last 10 years was €0.109 in 2014, and the most recent fiscal year payment was €0.456. This means that it has been growing its distributions at 15% per annum over that time. It is great to see strong growth in the dividend payments, but cuts are concerning as it may indicate the payout policy is too ambitious.

Miquel y Costas & Miquel Could Grow Its Dividend

With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. Miquel y Costas & Miquel has impressed us by growing EPS at 5.7% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Miquel y Costas & Miquel's prospects of growing its dividend payments in the future.

Our Thoughts On Miquel y Costas & Miquel's Dividend

In summary, it's great to see that the company can raise the dividend and keep it in a sustainable range. The dividend has been at reasonable levels historically, but that hasn't translated into a consistent payment. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Just as an example, we've come across 2 warning signs for Miquel y Costas & Miquel you should be aware of, and 1 of them is concerning. Is Miquel y Costas & Miquel not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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