The board of Bunge Global SA (NYSE:BG) has announced that it will pay a dividend on the 2nd of September, with investors receiving $0.70 per share. This makes the dividend yield about the same as the industry average at 3.3%.
Bunge Global's Projected Earnings Seem Likely To Cover Future Distributions
We like a dividend to be consistent over the long term, so checking whether it is sustainable is important. Based on the last payment, Bunge Global was earning enough to cover the dividend, but free cash flows weren't positive. We think that cash flows should take priority over earnings, so this is definitely a worry for the dividend going forward.
Looking forward, earnings per share is forecast to rise by 12.0% over the next year. Assuming the dividend continues along recent trends, we think the payout ratio could be 32% by next year, which is in a pretty sustainable range.
View our latest analysis for Bunge Global
Bunge Global Has A Solid Track Record
The company has an extended history of paying stable dividends. Since 2015, the dividend has gone from $1.36 total annually to $2.80. This implies that the company grew its distributions at a yearly rate of about 7.5% over that duration. Dividends have grown at a reasonable rate over this period, and without any major cuts in the payment over time, we think this is an attractive combination as it provides a nice boost to shareholder returns.
The Dividend Looks Likely To Grow
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. We are encouraged to see that Bunge Global has grown earnings per share at 16% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Bunge Global's prospects of growing its dividend payments in the future.
Our Thoughts On Bunge Global's Dividend
In summary, while it's always good to see the dividend being raised, we don't think Bunge Global's payments are rock solid. While Bunge Global is earning enough to cover the payments, the cash flows are lacking. We don't think Bunge Global is a great stock to add to your portfolio if income is your focus.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For instance, we've picked out 3 warning signs for Bunge Global that investors should take into consideration. 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.