Cranswick (LON:CWK) Will Pay A Larger Dividend Than Last Year At UK£0.56

Cranswick plc (LON:CWK) has announced that it will be increasing its dividend on the 2nd of September to UK£0.56. This makes the dividend yield about the same as the industry average at 2.5%.

View our latest analysis for Cranswick

Cranswick's Payment Has Solid Earnings Coverage

While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible. Before making this announcement, Cranswick was easily earning enough to cover the dividend. This means that most of what the business earns is being used to help it grow.

Looking forward, earnings per share is forecast to rise by 5.6% over the next year. Assuming the dividend continues along recent trends, we think the payout ratio could be 41% by next year, which is in a pretty sustainable range.

Cranswick Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2012, the dividend has gone from UK£0.28 to UK£0.76. This works out to be a compound annual growth rate (CAGR) of approximately 11% a year over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

Cranswick Could Grow Its Dividend

The company's investors will be pleased to have been receiving dividend income for some time. We are encouraged to see that Cranswick has grown earnings per share at 9.4% per year over the past five years. Cranswick definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Cranswick 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. 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. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 11 analysts we track are forecasting for Cranswick for free with public analyst estimates for the company. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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