Movado Group (NYSE:MOV) Has Affirmed Its Dividend Of $0.35

Movado Group, Inc. (NYSE:MOV) has announced that it will pay a dividend of $0.35 per share on the 21st of September. This means the annual payment is 5.4% of the current stock price, which is above the average for the industry.

View our latest analysis for Movado Group

Movado Group's Earnings Easily Cover The Distributions

A big dividend yield for a few years doesn't mean much if it can't be sustained. The last dividend was quite easily covered by Movado Group's earnings. This indicates that quite a large proportion of earnings is being invested back into the business.

Looking forward, earnings per share is forecast to rise by 19.2% over the next year. If the dividend continues on this path, the payout ratio could be 73% by next year, which we think can be pretty sustainable going forward.

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. Since 2013, the dividend has gone from $0.20 total annually to $1.40. This implies that the company grew its distributions at a yearly rate of about 21% over that duration. Movado Group has grown distributions at a rapid rate despite cutting the dividend at least once in the past. Companies that cut once often cut again, so we would be cautious about buying this stock solely for the dividend income.

The Dividend Looks Likely To Grow

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. We are encouraged to see that Movado Group has grown earnings per share at 152% per year over the past five years. The company's earnings per share has grown rapidly in recent years, and it has a good balance between reinvesting and paying dividends to shareholders, so we think that Movado Group could prove to be a strong dividend payer.

We Really Like Movado Group's Dividend

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. Earnings are easily covering distributions, and the company is generating plenty of cash. 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. However, there are other things to consider for investors when analysing stock performance. As an example, we've identified 1 warning sign for Movado Group that you should be aware of before investing. Is Movado Group not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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