Citigroup (NYSE:C) Is Paying Out A Larger Dividend Than Last Year
The board of Citigroup Inc. (NYSE:C) has announced that it will be increasing its dividend by 3.9% on the 25th of August to $0.53, up from last year's comparable payment of $0.51. This takes the dividend yield to 4.3%, which shareholders will be pleased with.
View our latest analysis for Citigroup
Citigroup's Payment Expected To Have Solid Earnings Coverage
We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable.
Having distributed dividends for at least 10 years, Citigroup has a long history of paying out a part of its earnings to shareholders. Past distributions do not necessarily guarantee future ones, but Citigroup's payout ratio of 32% is a good sign as this means that earnings decently cover dividends.
Looking forward, EPS is forecast to rise by 12.6% over the next 3 years. Analysts estimate the future payout ratio will be 35% over the same time period, which is in the range that makes us comfortable with the sustainability of the dividend.
Citigroup 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 dividend has gone from an annual total of $0.04 in 2013 to the most recent total annual payment of $2.04. This implies that the company grew its distributions at a yearly rate of about 48% over that duration. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.
The Dividend Looks Likely To Grow
The company's investors will be pleased to have been receiving dividend income for some time. Citigroup has seen EPS rising for the last five years, at 17% per annum. With a decent amount of growth and a low payout ratio, we think this bodes well for Citigroup's prospects of growing its dividend payments in the future.
We Really Like Citigroup's Dividend
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.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 18 analysts we track are forecasting for Citigroup for free with public analyst estimates for the company. Is Citigroup 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.
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