Coca-Cola FEMSA. de (NYSE:KOF) Will Pay A Larger Dividend Than Last Year At US$1.34

Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) will increase its dividend on the 13th of May to US$1.34. This makes the dividend yield 4.7%, which is above the industry average.

Check out our latest analysis for Coca-Cola FEMSA. de

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

If the payments aren't sustainable, a high yield for a few years won't matter that much. The last dividend was quite easily covered by Coca-Cola FEMSA. de's earnings. This indicates that a lot of the earnings are being reinvested into the business, with the aim of fueling growth.

Over the next year, EPS is forecast to fall by 6.7%. If the dividend continues along the path it has been on recently, we estimate the payout ratio could be 4.0%, which is comfortable for the company to continue in the future.

Coca-Cola FEMSA. de Has A Solid Track Record

The company has an extended history of paying stable dividends. The dividend has gone from Mex$27.70 in 2012 to the most recent annual payment of Mex$50.40. This implies that the company grew its distributions at a yearly rate of about 6.2% over that duration. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.

We Could See Coca-Cola FEMSA. de's Dividend Growing

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. We are encouraged to see that Coca-Cola FEMSA. de has grown earnings per share at 9.0% per year over the past five years. Earnings are on the uptrend, and it is only paying a small portion of those earnings to shareholders.

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 distributions are easily covered by earnings, and there is plenty of cash being generated as well. We should point out that the earnings are expected to fall over the next 12 months, which won't be a problem if this doesn't become a trend, but could cause some turbulence in the next year. Taking this all into consideration, this looks like it could be a good dividend opportunity.

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 15 analysts we track are forecasting for Coca-Cola FEMSA. de for free with public analyst estimates for the company. Is Coca-Cola FEMSA. 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.