Constellation Brands (NYSE:STZ) Is Increasing Its Dividend To $1.02

Constellation Brands, Inc. (NYSE:STZ) will increase its dividend from last year's comparable payment on the 15th of May to $1.02. Despite this raise, the dividend yield of 2.2% is only a modest boost to shareholder returns.AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. Constellation Brands' Projections Indicate Future Payments May Be UnsustainableEstimates Indicate Constellation Brands' Could Struggle to Maintain Dividend Payments In The FutureConstellation Brands' Future Dividends May Potentially Be At Risk If it is predictable over a long period, even low dividend yields can be attractive. Constellation Brands is not generating a profit, but its free cash flows easily cover the dividend, leaving plenty for reinvestment in the business. We generally think that cash flow is more important than accounting measures of profit, so we are fairly comfortable with the dividend at this level. Earnings per share is forecast to rise by 113.0% 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 getting very high over the next year. NYSE:STZ Historic Dividend April 13th 2025 See our latest analysis for Constellation Brands Constellation Brands Has A Solid Track Record The company has an extended history of paying stable dividends. The dividend has gone from an annual total of $1.24 in 2015 to the most recent total annual payment of $4.08. This implies that the company grew its distributions at a yearly rate of about 13% over that duration. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period. Constellation Brands Could Grow Its Dividend Investors could be attracted to the stock based on the quality of its payment history. It's encouraging to see that Constellation Brands has been growing its earnings per share at 5.3% a year over the past five years. Even though the company isn't making a profit, strong earnings growth could turn that around in the near future. As long as the company becomes profitable soon, it is on a trajectory that could see it being a solid dividend payer. In Summary Overall, this is probably not a great income stock, even though the dividend is being raised at the moment. The company is generating plenty of cash, but we still think the dividend is a bit high for comfort. We don't think Constellation Brands is a great stock to add to your portfolio if income is your focus. Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've picked out 2 warning signs for Constellation Brands 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. If you're looking to trade Constellation Brands, open an account with the lowest-cost platform trusted by professionals, Interactive Brokers.With clients in over 200 countries and territories, and access to 160 markets, IBKR lets you trade stocks, options, futures, forex, bonds and funds from a single integrated account.Enjoy no hidden fees, no account minimums, and FX conversion rates as low as 0.03%, far better than what most brokers offer.Sponsored Content