Schneider Electric's (EPA:SU) Shareholders Will Receive A Bigger Dividend Than Last Year

Schneider Electric S.E.'s (EPA:SU) dividend will be increasing from last year's payment of the same period to €3.15 on 11th of May. This makes the dividend yield about the same as the industry average at 2.2%.

Check out our latest analysis for Schneider Electric

Schneider Electric's Earnings Easily Cover The Distributions

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important. The last dividend was quite easily covered by Schneider Electric's earnings. This indicates that quite a large proportion of earnings is being invested back into the business.

Looking forward, earnings per share is forecast to rise by 37.3% over the next year. Assuming the dividend continues along recent trends, we think the payout ratio could be 39% by next year, which is in a pretty sustainable range.

Schneider Electric Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2013, the dividend has gone from €1.70 total annually to €3.15. This means that it has been growing its distributions at 6.4% per annum over that time. Dividends have grown at a reasonable rate over this period, and without any major cuts in the payment over time, we think this is an attractive combination as it provides a nice boost to shareholder returns.

Schneider Electric Could Grow Its Dividend

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Schneider Electric has impressed us by growing EPS at 9.1% per year over the past five years. The company is paying a reasonable amount of earnings to shareholders, and is growing earnings at a decent rate so we think it could be a decent dividend stock.

Schneider Electric Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that Schneider Electric is a strong income stock thanks to its track record and growing earnings. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. 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 Schneider Electric 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.