Caisse régionale de Crédit Agricole Mutuel Atlantique Vendée (EPA:CRAV) Is Paying Out Less In Dividends Than Last Year

Caisse régionale de Crédit Agricole Mutuel Atlantique Vendée (EPA:CRAV) has announced it will be reducing its dividend payable on the 16th of May to €3.53, which is 4.9% lower than what investors received last year for the same period. This payment takes the dividend yield to 3.8%, which only provides a modest boost to overall returns.

See our latest analysis for Caisse régionale de Crédit Agricole Mutuel Atlantique Vendée

Caisse régionale de Crédit Agricole Mutuel Atlantique Vendée's Dividend Forecasted To Be Well Covered By Earnings

The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock.

Having distributed dividends for at least 10 years, Caisse régionale de Crédit Agricole Mutuel Atlantique Vendée has a long history of paying out a part of its earnings to shareholders. Based on Caisse régionale de Crédit Agricole Mutuel Atlantique Vendée's last earnings report, the payout ratio is at a decent 34%, meaning that the company is able to pay out its dividend with a bit of room to spare.

Unless the company can turn things around, EPS could fall by 8.1% over the next year. If the dividend continues along recent trends, we estimate the future payout ratio could be 34%, which we consider to be quite comfortable, with most of the company's earnings left over to grow the business in the future.

Dividend Volatility

The company's dividend history has been marked by instability, with at least one cut in the last 10 years. The dividend has gone from an annual total of €4.51 in 2015 to the most recent total annual payment of €3.71. Doing the maths, this is a decline of about 1.9% per year. A company that decreases its dividend over time generally isn't what we are looking for.

Dividend Growth Is Doubtful

Given that the dividend has been cut in the past, we need to check if earnings are growing and if that might lead to stronger dividends in the future. Caisse régionale de Crédit Agricole Mutuel Atlantique Vendée has seen earnings per share falling at 8.1% per year over the last five years. If the company is making less over time, it naturally follows that it will also have to pay out less in dividends.

Our Thoughts On Caisse régionale de Crédit Agricole Mutuel Atlantique Vendée's Dividend

Overall, it's not great to see that the dividend has been cut, but this might be explained by the payments being a bit high previously. While Caisse régionale de Crédit Agricole Mutuel Atlantique Vendée is earning enough to cover the dividend, we are generally unimpressed with its future prospects. Overall, we don't think this company has the makings of a good 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. As an example, we've identified 2 warning signs for Caisse régionale de Crédit Agricole Mutuel Atlantique Vendée that you should be aware of before investing. 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.