Ipsen (EPA:IPN) Has Announced A Dividend Of €1.20

Ipsen S.A. (EPA:IPN) has announced that it will pay a dividend of €1.20 per share on the 3rd of June. This means the annual payment will be 1.0% of the current stock price, which is lower than the industry average.

Check out our latest analysis for Ipsen

Ipsen's Dividend Is Well Covered By Earnings

The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock. However, Ipsen's earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.

Over the next year, EPS is forecast to expand by 26.9%. If the dividend continues along recent trends, we estimate the payout ratio will be 13%, which is in the range that makes us comfortable with the sustainability of the dividend.

Ipsen 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. Since 2014, the annual payment back then was €0.80, compared to the most recent full-year payment of €1.20. This means that it has been growing its distributions at 4.1% per annum over that time. Although we can't deny that the dividend has been remarkably stable in the past, the growth has been pretty muted.

We Could See Ipsen's Dividend Growing

Investors could be attracted to the stock based on the quality of its payment history. We are encouraged to see that Ipsen has grown earnings per share at 9.8% per year over the past five years. Ipsen definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Ipsen Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think Ipsen might even raise payments in the future. 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.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 12 analysts we track are forecasting for Ipsen for free with public analyst estimates for the company. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.