Bolsa Mexicana de Valores. de's (BMV:BOLSAA) Shareholders Will Receive A Bigger Dividend Than Last Year

The board of Bolsa Mexicana de Valores, S.A.B. de C.V. (BMV:BOLSAA) has announced that it will be increasing its dividend on the 16th of May to Mex$2.16. This will take the annual payment from 5.4% to 5.4% of the stock price, which is above what most companies in the industry pay.

View our latest analysis for Bolsa Mexicana de Valores. de

Bolsa Mexicana de Valores. de's Earnings Easily Cover the Distributions

If the payments aren't sustainable, a high yield for a few years won't matter that much. Prior to this announcement, Bolsa Mexicana de Valores. de's dividend made up quite a large proportion of earnings but only 67% of free cash flows. This leaves plenty of cash for reinvestment into the business.

Over the next year, EPS is forecast to fall by 3.1%. If recent patterns in the dividend continue, we could see the payout ratio reaching 86% in the next 12 months, which is on the higher end of the range we would say is sustainable.

Bolsa Mexicana de Valores. de Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2012, the first annual payment was Mex$0.91, compared to the most recent full-year payment of Mex$2.16. This means that it has been growing its distributions at 9.0% per annum over that time. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.

The Dividend Looks Likely To Grow

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. It's encouraging to see Bolsa Mexicana de Valores. de has been growing its earnings per share at 11% a year over the past five years. EPS has been growing at a reasonable rate, although with most of the profits being paid out to shareholders, growth prospects could be more limited in the future.

Bolsa Mexicana de Valores. de Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that Bolsa Mexicana de Valores. de is a strong income stock thanks to its track record and growing earnings. The company is generating plenty of cash, and the earnings also quite easily cover the distributions. If earnings do fall over the next 12 months, the dividend could be buffeted a little bit, but we don't think it should cause too much of a problem in the long term. All in all, this checks a lot of the boxes we look for when choosing an income stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Earnings growth generally bodes well for the future value of company dividend payments. See if the 7 Bolsa Mexicana de Valores. de analysts we track are forecasting continued growth with our free report on analyst estimates for the company. Is Bolsa Mexicana de Valores. 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.