Coca-Cola FEMSA. de (NYSE:KOF) Is Increasing Its Dividend To MX$1.43

Coca-Cola FEMSA, S.A.B. de C.V.'s (NYSE:KOF) dividend will be increasing from last year's payment of the same period to MX$1.43 on 1st of January. This takes the dividend yield to 3.6%, which shareholders will be pleased with.

View our latest analysis for Coca-Cola FEMSA. de

Coca-Cola FEMSA. de's Payment Has Solid Earnings Coverage

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. Prior to this announcement, Coca-Cola FEMSA. de's dividend was comfortably covered by both cash flow and earnings. This means that a large portion of its earnings are being retained to grow the business.

Over the next year, EPS is forecast to expand by 16.6%. Assuming the dividend continues along recent trends, we think the payout ratio could be 2.8% by next year, which is in a pretty sustainable range.

Coca-Cola FEMSA. de Has A Solid Track Record

The company has an extended history of paying stable dividends. The dividend has gone from an annual total of MX$27.70 in 2013 to the most recent total annual payment of MX$54.30. This means that it has been growing its distributions at 7.0% per annum over that time. Companies like this can be very valuable over the long term, if the decent rate of growth can be maintained.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. Coca-Cola FEMSA. de has seen EPS rising for the last five years, at 43% per annum. The company doesn't have any problems growing, despite returning a lot of capital to shareholders, which is a very nice combination for a dividend stock to have.

We Really Like Coca-Cola FEMSA. de's Dividend

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. 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. 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 14 Coca-Cola FEMSA. de analysts we track are forecasting continued growth with our free report on analyst estimates for the company. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.