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The board of Merkur PrivatBank KgaA (ETR:MBK) has announced that it will pay a dividend on the 26th of June, with investors receiving €0.50 per share. This means the annual payment will be 3.2% of the current stock price, which is lower than the industry average.
Merkur PrivatBank KgaA's Dividend Forecasted To Be Well Covered By Earnings
It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable.
Merkur PrivatBank KgaA has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Based on Merkur PrivatBank KgaA's last earnings report, the payout ratio is at a decent 36%, meaning that the company is able to pay out its dividend with a bit of room to spare.
Over the next 3 years, EPS is forecast to expand by 26.8%. Analysts forecast the future payout ratio could be 33% over the same time horizon, which is a number we think the company can maintain.
Check out our latest analysis for Merkur PrivatBank KgaA
Merkur PrivatBank KgaA Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2015, the annual payment back then was €0.20, compared to the most recent full-year payment of €0.50. This works out to be a compound annual growth rate (CAGR) of approximately 9.6% a year over that time. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.
Merkur PrivatBank KgaA May Find It Hard To Grow The Dividend
Investors could be attracted to the stock based on the quality of its payment history. While EPS growth is quite low, Merkur PrivatBank KgaA has the option to increase the payout ratio to return more cash to shareholders.
We Really Like Merkur PrivatBank KgaA's Dividend
Overall, we like to see the dividend staying consistent, and we think Merkur PrivatBank KgaA 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 of these factors considered, we think this has solid potential as a dividend stock.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. You can also discover whether shareholders are aligned with insider interests by checking our visualisation of insider shareholdings and trades in Merkur PrivatBank KgaA stock. Is Merkur PrivatBank KgaA 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.