FEMSAUBD Shareholders Getting Bigger Dividend
On November 7th, Fomento Económico Mexicano, S.A.B. de C.V. (BMV:FEMSAUBD) will raise their dividend payout to MX$1.83. The new dividend yield will be 2.1%. This is a common rate for the industry.
Here's our newest analysis on Fomento Económico Mexicano. The company's main focus is beverage distribution and retail. We did an assessment of their financial performance over the past few years, and it looks promising. Revenue growth was consistent, and there was a significant increase in net income in 2020. Their balance sheet also remains strong, with a solid liquidity position. Overall, Fomento Económico Mexicano seems like a solid investment opportunity.
Mexico's FEMSA Has Strong Earnings Coverage For Payments
We want dividends to be consistent for a long time and need to check if it's sustainable. Fomento Económico Mexicano. de's dividend was covered by cash flow and earnings before the announcement, so a lot of earnings are being saved to grow the business.
In the coming year, EPS will increase by 41.8%. If the dividend keeps going as it has been, we predict that the payout ratio will reach 34% by next year. This range is very sustainable.
Mexican Company Femsa Has A Strong Record
The company gives dividends for a while, and they're not changing much. This means we're confident they'll keep giving dividends in the future. From 2013 until now, the number of dividends went from MX$1.86 a year to MX$3.66 a year. This means the company gave about 7% more dividends each year. They didn't cut the dividends, so we think this is great for shareholders.
Limited Growth Prospects For Dividend
Investors who have shares in the company enjoy lots of dividend income. But there's a problem. The company's earnings per share have been going down by 5% a year, for five years. So, if this continues, they might have to stop the dividends. However, the company's earnings are expected to go up next year. But we should see if it grows before we get too happy.
To sum up, the company raised the dividend and it's sustainable. The earnings coverage is good, but payout ratio needs monitoring as earnings keep reducing. Payment isn't excellent, but good for adding to dividend portfolio.
Most investors like companies that pay regular dividends. But there are other things to think about too. We've found a possible issue with Fomento Económico Mexicano. de that investors should know about. Maybe you don't want to invest in that company. If so, we have other dividend stocks you might like.
Simplifying Valuation: Our Mission
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