Wal-Mart de México. de's (BMV:WALMEX) Upcoming Dividend Will Be Larger Than Last Year's

The board of Wal-Mart de México, S.A.B. de C.V. (BMV:WALMEX) has announced that it will be increasing its dividend by 4.9% on the 24th of November to Mex$0.85. Based on the announced payment, the dividend yield for the company will be 2.1%, which is fairly typical for the industry.

See our latest analysis for Wal-Mart de México. de

Wal-Mart de México. de's Earnings Easily Cover the Distributions

We aren't too impressed by dividend yields unless they can be sustained over time. Before making this announcement, Wal-Mart de México. de was easily earning enough to cover the dividend. This means that most of its earnings are being retained to grow the business.

Looking forward, earnings per share is forecast to rise by 10.9% over the next year. If the dividend continues on this path, the payout ratio could be 65% by next year, which we think can be pretty sustainable going forward.

Wal-Mart de México. de Has A Solid Track Record

The company has an extended history of paying stable dividends. The first annual payment during the last 10 years was Mex$0.38 in 2012, and the most recent fiscal year payment was Mex$1.63. This implies that the company grew its distributions at a yearly rate of about 16% 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.

The Dividend Has Growth Potential

The company's investors will be pleased to have been receiving dividend income for some time. It's encouraging to see Wal-Mart de México. de has been growing its earnings per share at 9.1% a year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.

Wal-Mart de México. de 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.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. 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 12 analysts we track are forecasting for Wal-Mart de México. de for free with public analyst estimates for the company. Is Wal-Mart de México. 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.