Caisse régionale de Crédit Agricole Mutuel Atlantique Vendée (EPA:CRAV) Is Reducing Its Dividend To €3.53

The board of Caisse régionale de Crédit Agricole Mutuel Atlantique Vendée (EPA:CRAV) has announced it will be reducing its dividend by 4.9% from last year's payment of €3.71 on the 16th of May, with shareholders receiving €3.53. This means that the annual payment is 3.8% of the current stock price, which is lower than what the rest of the industry is paying.

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

Caisse régionale de Crédit Agricole Mutuel Atlantique Vendée's Earnings Will Easily Cover The Distributions

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

Caisse régionale de Crédit Agricole Mutuel Atlantique Vendée has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 34%, which means that Caisse régionale de Crédit Agricole Mutuel Atlantique Vendée would be able to pay its last dividend without pressure on the balance sheet.

EPS is set to fall by 5.3% over the next 12 months if recent trends continue. If the dividend continues along recent trends, we estimate the future payout ratio could be 31%, 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

Although the company has a long dividend history, it has been cut at least once 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. The dividend has shrunk at around 1.9% a year during that period. A company that decreases its dividend over time generally isn't what we are looking for.

Dividend Growth May Be Hard To Come By

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. Over the past five years, it looks as though Caisse régionale de Crédit Agricole Mutuel Atlantique Vendée's EPS has declined at around 5.3% a year. 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. The company hasn't been paying a very consistent dividend over time, despite only paying out a small portion of earnings. We don't think Caisse régionale de Crédit Agricole Mutuel Atlantique Vendée is a great stock to add to your portfolio if income is your focus.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For instance, we've picked out 1 warning sign for Caisse régionale de Crédit Agricole Mutuel Atlantique Vendée that investors should take into consideration. 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.