Yahoo Finance Cembra Money Bank (VTX:CMBN) Is Increasing Its Dividend To CHF3.95
Cembra Money Bank AG (VTX:CMBN) has announced that it will be increasing its periodic dividend on the 27th of April to CHF3.95, which will be 2.6% higher than last year's comparable payment amount of CHF3.85. This will take the annual payment to 4.9% of the stock price, which is above what most companies in the industry pay.
View our latest analysis for Cembra Money Bank
Cembra Money Bank's Dividend Forecasted To Be Well Covered By Earnings
While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable.
Cembra Money Bank has a good history of paying out dividends, with its current track record at 9 years. Past distributions do not necessarily guarantee future ones, but Cembra Money Bank's payout ratio of 66% is a good sign for current shareholders as this means that earnings decently cover dividends.
The next 3 years are set to see EPS grow by 11.7%. Analysts estimate the future payout ratio will be 69% over the same time period, which is in the range that makes us comfortable with the sustainability of the dividend.
Cembra Money Bank Is Still Building Its Track Record
It is great to see that Cembra Money Bank has been paying a stable dividend for a number of years now, however we want to be a bit cautious about whether this will remain true through a full economic cycle. Since 2014, the annual payment back then was CHF2.85, compared to the most recent full-year payment of CHF3.85. This works out to be a compound annual growth rate (CAGR) of approximately 3.4% a year over that time. Cembra Money Bank hasn't been paying a dividend for very long, so we wouldn't get to excited about its record of growth just yet.
Dividend Growth May Be Hard To Achieve
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Earnings per share has been crawling upwards at 2.4% per year. The company has been growing at a pretty soft 2.4% per annum, and is paying out quite a lot of its earnings to shareholders. This could mean the dividend doesn't have the growth potential we look for going into the future.
In Summary
Overall, it's great to see the dividend being raised and that it is still in a sustainable range. While the payout ratios are a good sign, we are less enthusiastic about the company's dividend record. Taking all of this into consideration, the dividend looks viable moving forward, but investors should be mindful that the company has pushed the boundaries of sustainability in the past and may do so again.
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. Case in point: We've spotted 2 warning signs for Cembra Money Bank (of which 1 is a bit concerning!) you should know about. Is Cembra Money Bank 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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