CEWE Stiftung KGaA's (ETR:CWC) Shareholders Will Receive A Bigger Dividend Than Last Year

CEWE Stiftung & Co. KGaA (ETR:CWC) has announced that it will be increasing its dividend from last year's comparable payment on the 9th of June to €2.85. Despite this raise, the dividend yield of 2.8% is only a modest boost to shareholder returns.

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CEWE Stiftung KGaA's Future Dividend Projections Appear Well Covered By Earnings

Even a low dividend yield can be attractive if it is sustained for years on end. Before making this announcement, CEWE Stiftung KGaA was easily earning enough to cover the dividend. This means that most of what the business earns is being used to help it grow.

Looking forward, earnings per share is forecast to rise by 14.0% over the next year. 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.

Check out our latest analysis for CEWE Stiftung KGaA

CEWE Stiftung KGaA Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. The dividend has gone from an annual total of €1.50 in 2015 to the most recent total annual payment of €2.85. This means that it has been growing its distributions at 6.6% per annum over that time. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. It's encouraging to see that CEWE Stiftung KGaA has been growing its earnings per share at 15% a year over the past five years. CEWE Stiftung KGaA definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

CEWE Stiftung KGaA Looks Like A Great Dividend Stock

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Distributions are quite easily covered by earnings, which are also being converted to cash flows. 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. Earnings growth generally bodes well for the future value of company dividend payments. See if the 6 CEWE Stiftung KGaA 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.