Bolloré (EPA:BOL) Has Re-Affirmed Its Dividend Of €0.04

Bolloré SE (EPA:BOL) has announced that it will pay a dividend of €0.04 per share on the 13th of June. Based on this payment, the dividend yield will be 1.3%, which is fairly typical for the industry.

Check out our latest analysis for Bolloré

Bolloré Might Find It Hard To Continue The Dividend

While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible. However, prior to this announcement, Bolloré's dividend was comfortably covered by both cash flow and earnings. 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 fall by 44.1% over the next year. This will push the company into unprofitability, which means the managers will have to choose between suspending the dividend, or paying it out of cash reserves.

Bolloré Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. The dividend has gone from €0.03 in 2012 to the most recent annual payment of €0.06. This works out to be a compound annual growth rate (CAGR) of approximately 7.2% a year over that time. The growth of the dividend has been pretty reliable, so we think this can offer investors some nice additional income in their portfolio.

Dividend Growth Is Doubtful

The company's investors will be pleased to have been receiving dividend income for some time. Let's not jump to conclusions as things might not be as good as they appear on the surface. Over the past five years, it looks as though Bolloré's EPS has declined at around 9.6% a year. If the company is making less over time, it naturally follows that it will also have to pay out less in dividends.

Our Thoughts On Bolloré's Dividend

Overall, a consistent dividend is a good thing, and we think that Bolloré has the ability to continue this into the future. The earnings coverage is acceptable for now, but with earnings on the decline we would definitely keep an eye on the payout ratio. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. See if management have their own wealth at stake, by checking insider shareholdings in Bolloré stock. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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