NWF Group's (LON:NWF) Dividend Will Be Increased To UK£0.062

NWF Group plc's (LON:NWF) dividend will be increasing on the 10th of December to UK£0.062, with investors receiving 5.1% more than last year. This takes the annual payment to 3.3% of the current stock price, which is about average for the industry.

See our latest analysis for NWF Group

NWF Group's Payment Has Solid Earnings Coverage

We aren't too impressed by dividend yields unless they can be sustained over time. Prior to this announcement, NWF Group's dividend was comfortably covered by both cash flow and 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 6.0% over the next year. Assuming the dividend continues along recent trends, we think the payout ratio could be 45% by next year, which is in a pretty sustainable range.

NWF Group Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2011, the dividend has gone from UK£0.043 to UK£0.072. This implies that the company grew its distributions at a yearly rate of about 5.3% over that duration. The growth of the dividend has been pretty reliable, so we think this can offer investors some nice additional income in their portfolio.

We Could See NWF Group's Dividend Growing

The company's investors will be pleased to have been receiving dividend income for some time. NWF Group has seen EPS rising for the last five years, at 10.0% per annum. 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.

NWF Group Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that NWF Group 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 in all, this checks a lot of the boxes we look for when choosing an income stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. Now, if you want to look closer, it would be worth checking out our free research on NWF Group management tenure, salary, and performance. Looking for more high-yielding dividend ideas? Try our curated list of strong dividend payers.

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