Miquel y Costas & Miquel (BME:MCM) Will Pay A Larger Dividend Than Last Year At €0.0948
The board of Miquel y Costas & Miquel, S.A. (BME:MCM) has announced that it will be paying its dividend of €0.0948 on the 17th of December, an increased payment from last year's comparable dividend. This takes the annual payment to 3.4% of the current stock price, which is about average for the industry.
Miquel y Costas & Miquel's Payment Could Potentially Have Solid Earnings Coverage
Unless the payments are sustainable, the dividend yield doesn't mean too much. However, Miquel y Costas & Miquel's earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.
Over the next year, EPS could expand by 3.3% if recent trends continue. If the dividend continues on this path, the payout ratio could be 34% by next year, which we think can be pretty sustainable going forward.
View our latest analysis for Miquel y Costas & Miquel
Miquel y Costas & Miquel's Dividend Has Lacked Consistency
Even in its relatively short history, the company has reduced the dividend at least once. Due to this, we are a little bit cautious about the dividend consistency over a full economic cycle. The dividend has gone from an annual total of €0.212 in 2017 to the most recent total annual payment of €0.481. This works out to be a compound annual growth rate (CAGR) of approximately 11% a year over that time. Despite the rapid growth in the dividend over the past number of years, we have seen the payments go down the past as well, so that makes us cautious.
Miquel y Costas & Miquel May Find It Hard To Grow The Dividend
With a relatively unstable dividend, it's even more important to see if earnings per share is growing. Earnings per share has been crawling upwards at 3.3% per year. While growth may be thin on the ground, Miquel y Costas & Miquel could always pay out a higher proportion of earnings to increase shareholder returns.
Our Thoughts On Miquel y Costas & Miquel's Dividend
In summary, it's great to see that the company can raise the dividend and keep it in a sustainable range. While the payout ratios are a good sign, we are less enthusiastic about the company's dividend record. The dividend looks okay, but there have been some issues in the past, so we would be a little bit cautious.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've identified 2 warning signs for Miquel y Costas & Miquel (1 is a bit unpleasant!) 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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