Church & Dwight (NYSE:CHD) Has Announced That It Will Be Increasing Its Dividend To $0.2838

Church & Dwight Co., Inc.'s (NYSE:CHD) dividend will be increasing from last year's payment of the same period to $0.2838 on 1st of March. Even though the dividend went up, the yield is still quite low at only 1.1%.

Check out our latest analysis for Church & Dwight

Church & Dwight's Payment Has Solid Earnings Coverage

The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock. Before making this announcement, Church & Dwight was easily earning enough to cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

The next year is set to see EPS grow by 29.7%. Assuming the dividend continues along recent trends, we think the payout ratio could be 30% by next year, which is in a pretty sustainable range.

Church & Dwight Has A Solid Track Record

The company has an extended history of paying stable dividends. The dividend has gone from an annual total of $0.56 in 2014 to the most recent total annual payment of $1.14. This means that it has been growing its distributions at 7.3% 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 Has Growth Potential

The company's investors will be pleased to have been receiving dividend income for some time. Church & Dwight has impressed us by growing EPS at 5.8% per year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.

We Really Like Church & Dwight's Dividend

Overall, a dividend increase is always good, and we think that Church & Dwight is a strong income stock thanks to its track record and growing earnings. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All of these factors considered, we think this has solid potential as a dividend stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For instance, we've picked out 1 warning sign for Church & Dwight that investors should take into consideration. Is Church & Dwight 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.