Etablissements Maurel & Prom (EPA:MAU) Has Announced That It Will Be Increasing Its Dividend To $0.30

Etablissements Maurel & Prom S.A.'s (EPA:MAU) dividend will be increasing from last year's payment of the same period to $0.30 on 5th of July. Even though the dividend went up, the yield is still quite low at only 3.6%.

View our latest analysis for Etablissements Maurel & Prom

Etablissements Maurel & Prom's Dividend Is Well Covered By Earnings

Even a low dividend yield can be attractive if it is sustained for years on end. Before making this announcement, Etablissements Maurel & Prom was easily earning enough to cover the dividend. This means that most of what the business earns is being used to help it grow.

The next year is set to see EPS grow by 9.4%. If the dividend continues along recent trends, we estimate the payout ratio will be 23%, which is in the range that makes us comfortable with the sustainability of the dividend.

Etablissements Maurel & Prom's Dividend Has Lacked Consistency

Etablissements Maurel & Prom has been paying dividends for a while, but the track record isn't stellar. Due to this, we are a little bit cautious about the dividend consistency over a full economic cycle. Since 2019, the annual payment back then was $0.0427, compared to the most recent full-year payment of $0.244. This works out to be a compound annual growth rate (CAGR) of approximately 42% a year over that time. Dividends have grown rapidly over this time, but with cuts in the past we are not certain that this stock will be a reliable source of income in the future.

The Dividend Looks Likely To Grow

Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. We are encouraged to see that Etablissements Maurel & Prom has grown earnings per share at 28% per year over the past five years. A low payout ratio gives the company a lot of flexibility, and growing earnings also make it very easy for it to grow the dividend.

Etablissements Maurel & Prom 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. All of these factors considered, we think this has solid potential as a dividend stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For instance, we've picked out 1 warning sign for Etablissements Maurel & Prom that investors should take into consideration. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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