Celanese's (NYSE:CE) Dividend Will Be $0.70

The board of Celanese Corporation (NYSE:CE) has announced that it will pay a dividend on the 13th of May, with investors receiving $0.70 per share. This payment means that the dividend yield will be 1.8%, which is around the industry average.

View our latest analysis for Celanese

Celanese's Dividend Is Well Covered By Earnings

We aren't too impressed by dividend yields unless they can be sustained over time. However, Celanese's earnings easily cover the dividend. This means that most of its earnings are being retained to grow the business.

EPS is set to fall by 26.3% over the next 12 months. Assuming the dividend continues along recent trends, we believe the payout ratio could be 24%, which we are pretty comfortable with and we think is feasible on an earnings basis.

Celanese Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. The annual payment during the last 10 years was $0.36 in 2014, and the most recent fiscal year payment was $2.80. This works out to be a compound annual growth rate (CAGR) of approximately 23% a year over that time. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. Celanese has impressed us by growing EPS at 14% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Celanese's prospects of growing its dividend payments in the future.

We Really Like Celanese's Dividend

Overall, we like to see the dividend staying consistent, and we think Celanese might even raise payments in the future. The distributions are easily covered by earnings, and there is plenty of cash being generated as well. If earnings do fall over the next 12 months, the dividend could be buffeted a little bit, but we don't think it should cause too much of a problem in the long term. 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. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've identified 3 warning signs for Celanese (2 are potentially serious!) that you should be aware of before investing. 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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