Costamare (NYSE:CMRE) Has Announced A Dividend Of $0.115
Costamare Inc. (NYSE:CMRE) has announced that it will pay a dividend of $0.115 per share on the 5th of February. This payment means the dividend yield will be 2.9%, which is below the average for the industry.
While the dividend yield is important for income investors, it is also important to consider any large share price moves, as this will generally outweigh any gains from distributions. Investors will be pleased to see that Costamare's stock price has increased by 36% in the last 3 months, which is good for shareholders and can also explain a decrease in the dividend yield.
Costamare's Future Dividends May Potentially Be At Risk
Even a low dividend yield can be attractive if it is sustained for years on end. However, Costamare's earnings easily cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.
Earnings per share is forecast to rise by 6.1% over the next year. However, if the dividend continues along recent trends, it could start putting pressure on the balance sheet with the payout ratio reaching 97% over the next year.
View our latest analysis for Costamare
Dividend Volatility
The company's dividend history has been marked by instability, with at least one cut in the last 10 years. The dividend has gone from an annual total of $1.12 in 2016 to the most recent total annual payment of $0.46. This works out to be a decline of approximately 8.5% per year over that time. Declining dividends isn't generally what we look for as they can indicate that the company is running into some challenges.
The Dividend Looks Likely To Grow
Given that the track record hasn't been stellar, we really want to see earnings per share growing over time. It's encouraging to see that Costamare has been growing its earnings per share at 14% a year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Costamare's prospects of growing its dividend payments in the future.
Costamare Looks Like A Great Dividend Stock
Overall, we like to see the dividend staying consistent, and we think Costamare might even raise payments in the future. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All in all, this checks a lot of the boxes we look for when choosing an income stock.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular 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 picked out 3 warning signs for Costamare that investors should know about before committing capital to this stock. 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.