Is Caisse Régionale de Crédit Agricole Mutuel de La Touraine et du Poitou Société Coopérative (EPA:CRTO) An Attractive Dividend Stock?

Could Caisse Régionale de Crédit Agricole Mutuel de La Touraine et du Poitou Société Coopérative (EPA:CRTO) be an attractive dividend share to own for the long haul? Investors are often drawn to strong companies with the idea of reinvesting the dividends. Yet sometimes, investors buy a stock for its dividend and lose money because the share price falls by more than they earned in dividend payments.

A high yield and a long history of paying dividends is an appealing combination for Caisse Régionale de Crédit Agricole Mutuel de La Touraine et du Poitou Société Coopérative. We'd guess that plenty of investors have purchased it for the income. Some simple analysis can reduce the risk of holding Caisse Régionale de Crédit Agricole Mutuel de La Touraine et du Poitou Société Coopérative for its dividend, and we'll focus on the most important aspects below.

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Payout ratios

Dividends are typically paid from company earnings. If a company pays more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. As a result, we should always investigate whether a company can afford its dividend, measured as a percentage of a company's net income after tax. Looking at the data, we can see that 26% of Caisse Régionale de Crédit Agricole Mutuel de La Touraine et du Poitou Société Coopérative's profits were paid out as dividends in the last 12 months. This is a middling range that strikes a nice balance between paying dividends to shareholders, and retaining enough earnings to invest in future growth. One of the risks is that management reinvests the retained capital poorly instead of paying a higher dividend.

Consider getting our latest analysis on Caisse Régionale de Crédit Agricole Mutuel de La Touraine et du Poitou Société Coopérative's financial position here.

Dividend Volatility

Before buying a stock for its income, we want to see if the dividends have been stable in the past, and if the company has a track record of maintaining its dividend. Caisse Régionale de Crédit Agricole Mutuel de La Touraine et du Poitou Société Coopérative has been paying dividends for a long time, but for the purpose of this analysis, we only examine the past 10 years of payments. The dividend has been cut on at least one occasion historically. During the past 10-year period, the first annual payment was €3.0 in 2010, compared to €3.2 last year. Its dividends have grown at less than 1% per annum over this time frame.

We're glad to see the dividend has risen, but with a limited rate of growth and fluctuations in the payments, we don't think this is an attractive combination.

Conclusion

When we look at a dividend stock, we need to form a judgement on whether the dividend will grow, if the company is able to maintain it in a wide range of economic circumstances, and if the dividend payout is sustainable. Firstly, we like that Caisse Régionale de Crédit Agricole Mutuel de La Touraine et du Poitou Société Coopérative has a low and conservative payout ratio. Second, earnings have been essentially flat, and its history of dividend payments is chequered - having cut its dividend at least once in the past. While we're not hugely bearish on it, overall we think there are potentially better dividend stocks than Caisse Régionale de Crédit Agricole Mutuel de La Touraine et du Poitou Société Coopérative out there.

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. Case in point: We've spotted 4 warning signs for Caisse Régionale de Crédit Agricole Mutuel de La Touraine et du Poitou Société Coopérative (of which 1 doesn't sit too well with us!) you should know about.

Looking for more high-yielding dividend ideas? Try our curated list of dividend stocks with a yield above 3%.

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This article by Simply Wall St is general in nature. 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.
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