El Puerto de Liverpool. de (BMV:LIVEPOLC-1) Is Increasing Its Dividend To MX$1.77

El Puerto de Liverpool, S.A.B. de C.V. (BMV:LIVEPOLC-1) has announced that it will be increasing its periodic dividend on the 24th of May to MX$1.77, which will be 13% higher than last year's comparable payment amount of MX$1.57. The payment will take the dividend yield to 1.9%, which is in line with the average for the industry.

View our latest analysis for El Puerto de Liverpool. de

El Puerto de Liverpool. de's Payment Has Solid Earnings Coverage

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important. However, El Puerto de Liverpool. de's earnings easily 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 17.1% over the next year. If the dividend continues along recent trends, we estimate the payout ratio will be 18%, which is in the range that makes us comfortable with the sustainability of the dividend.

Dividend Volatility

While the company has been paying a dividend for a long time, it has cut the dividend at least once in the last 10 years. The annual payment during the last 10 years was MX$1.20 in 2014, and the most recent fiscal year payment was MX$2.61. This means that it has been growing its distributions at 8.1% per annum over that time. It's good to see the dividend growing at a decent rate, but the dividend has been cut at least once in the past. El Puerto de Liverpool. de might have put its house in order since then, but we remain cautious.

The Dividend Looks Likely To Grow

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. It's encouraging to see that El Puerto de Liverpool. de has been growing its earnings per share at 12% a year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for El Puerto de Liverpool. de's prospects of growing its dividend payments in the future.

El Puerto de Liverpool. 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. All of these factors considered, we think this has solid potential as a dividend stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. 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 12 analysts we track are forecasting for El Puerto de Liverpool. de for free with public analyst estimates for the company. If you are a dividend investor, you might also want to look at our curated list of high yield 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.