Cranswick (LON:CWK) Is Paying Out A Larger Dividend Than Last Year

Cranswick plc (LON:CWK) has announced that it will be increasing its dividend from last year's comparable payment on the 2nd of September to £0.556. This takes the annual payment to 2.5% of the current stock price, which is about average for the industry.

Check out our latest analysis for Cranswick

Cranswick's Earnings Easily Cover the Distributions

Solid dividend yields are great, but they only really help us if the payment is sustainable. However, Cranswick'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 9.7%. Assuming the dividend continues along recent trends, we think the payout ratio could be 40% by next year, which is in a pretty sustainable range.

Cranswick Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2012, the dividend has gone from £0.277 total annually to £0.756. This implies that the company grew its distributions at a yearly rate of about 11% over that duration. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

Cranswick Could Grow Its Dividend

The company's investors will be pleased to have been receiving dividend income for some time. Cranswick has impressed us by growing EPS at 9.0% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Cranswick's prospects of growing its dividend payments in the future.

Cranswick Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that Cranswick is a strong income stock thanks to its track record and growing earnings. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All in all, this checks a lot of the boxes we look for when choosing an income stock.

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. As an example, we've identified 1 warning sign for Cranswick that you should be aware of before investing. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

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.