The board of Grupo Carso, S.A.B. de C.V. (BMV:GCARSOA1) has announced that it will pay a dividend on the 20th of December, with investors receiving MX$0.75 per share. Despite this raise, the dividend yield of 1.3% is only a modest boost to shareholder returns.
View our latest analysis for Grupo Carso. de
Grupo Carso. de's Payment Could Potentially Have Solid Earnings Coverage
Even a low dividend yield can be attractive if it is sustained for years on end. However, Grupo Carso. de's earnings easily cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.
The next year is set to see EPS grow by 8.1%. If the dividend continues along recent trends, we estimate the payout ratio will be 23%, which is in the range that makes us comfortable with the sustainability of the dividend.
Dividend Volatility
Although the company has a long dividend history, it has been cut at least once in the last 10 years. Since 2014, the dividend has gone from MX$0.80 total annually to MX$1.50. This works out to be a compound annual growth rate (CAGR) of approximately 6.5% a year over that time. We like to see dividends have grown at a reasonable rate, but with at least one substantial cut in the payments, we're not certain this dividend stock would be ideal for someone intending to live on the income.
Grupo Carso. de Could Grow Its Dividend
Given that the dividend has been cut in the past, we need to check if earnings are growing and if that might lead to stronger dividends in the future. Grupo Carso. de has seen EPS rising for the last five years, at 8.7% per annum. With a decent amount of growth and a low payout ratio, we think this bodes well for Grupo Carso. de's prospects of growing its dividend payments in the future.
We Really Like Grupo Carso. de's Dividend
Overall, a dividend increase is always good, and we think that Grupo Carso. de 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 of these factors considered, we think this has solid potential as a dividend stock.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 3 analysts we track are forecasting for Grupo Carso. de for free with public analyst estimates for the company. Is Grupo Carso. de not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
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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.
About BMV:GCARSO A1
Grupo Carso. de
Engages in the commercial, industrial, infrastructure and construction, and energy sectors.
Excellent balance sheet second-rate dividend payer.
