Compagnie de Saint-Gobain (EPA:SGO) Is Increasing Its Dividend To €2.20

Compagnie de Saint-Gobain S.A. (EPA:SGO) will increase its dividend from last year's comparable payment on the 11th of June to €2.20. Based on this payment, the dividend yield for the company will be 2.6%, which is fairly typical for the industry.

We've discovered 1 warning sign about Compagnie de Saint-Gobain. View them for free.

Compagnie de Saint-Gobain's Future Dividend Projections Appear Well Covered By Earnings

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important. However, Compagnie de Saint-Gobain's earnings easily cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

Looking forward, earnings per share is forecast to rise by 38.6% over the next year. If the dividend continues on this path, the payout ratio could be 29% by next year, which we think can be pretty sustainable going forward.

Check out our latest analysis for Compagnie de Saint-Gobain

Dividend Volatility

Although the company has a long dividend history, it has been cut at least once in the last 10 years. Since 2015, the dividend has gone from €1.24 total annually to €2.20. This implies that the company grew its distributions at a yearly rate of about 5.9% over that duration. It's good to see the dividend growing at a decent rate, but the dividend has been cut at least once in the past. Compagnie de Saint-Gobain might have put its house in order since then, but we remain cautious.

The Dividend Looks Likely To Grow

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. It's encouraging to see that Compagnie de Saint-Gobain has been growing its earnings per share at 17% a year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Compagnie de Saint-Gobain's prospects of growing its dividend payments in the future.

Compagnie de Saint-Gobain Looks Like A Great Dividend Stock

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've picked out 1 warning sign for Compagnie de Saint-Gobain that investors should know about before committing capital to this stock. Is Compagnie de Saint-Gobain not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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