Bénéteau (EPA:BEN) Is Paying Out A Larger Dividend Than Last Year

Bénéteau S.A.'s (EPA:BEN) dividend will be increasing from last year's payment of the same period to €0.42 on 23rd of June. This takes the annual payment to 2.6% of the current stock price, which is about average for the industry.

View our latest analysis for Bénéteau

Bénéteau's Payment Has Solid Earnings Coverage

Solid dividend yields are great, but they only really help us if the payment is sustainable. However, Bénéteau's earnings easily cover the dividend. This means that most of its earnings are being retained to grow the business.

The next year is set to see EPS grow by 56.0%. Assuming the dividend continues along recent trends, we think the payout ratio could be 25% by next year, which is in a pretty sustainable range.

Bénéteau's Dividend Has Lacked Consistency

It's comforting to see that Bénéteau has been paying a dividend for a number of years now, however it has been cut at least once in that time. This makes us cautious about the consistency of the dividend over a full economic cycle. Since 2015, the dividend has gone from €0.04 total annually to €0.42. This implies that the company grew its distributions at a yearly rate of about 34% over that duration. Despite the rapid growth in the dividend over the past number of years, we have seen the payments go down the past as well, so that makes us cautious.

The Dividend Looks Likely To Grow

With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. Bénéteau has seen EPS rising for the last five years, at 11% per annum. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.

Bénéteau 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. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. For instance, we've picked out 1 warning sign for Bénéteau that investors should take into consideration. Is Bénéteau not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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