Yahoo Finance Deutsche Bank (ETR:DBK) Is Increasing Its Dividend To €0.30
Deutsche Bank Aktiengesellschaft's (ETR:DBK) dividend will be increasing from last year's payment of the same period to €0.30 on 22nd of May. This makes the dividend yield about the same as the industry average at 3.1%.
View our latest analysis for Deutsche Bank
Deutsche Bank's Payment Expected To Have Solid Earnings Coverage
We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue.
Having distributed dividends for at least 10 years, Deutsche Bank has a long history of paying out a part of its earnings to shareholders. While past data isn't a guarantee for the future, Deutsche Bank's latest earnings report puts its payout ratio at 12%, showing that the company can pay out its dividends comfortably.
Looking forward, earnings per share is forecast to fall by 4.5% over the next 3 years. Fortunately, analysts forecast the future payout ratio to be 28% over the same time horizon, which is in the range that makes us comfortable with the sustainability of the dividend.
Dividend Volatility
The company has a long dividend track record, but it doesn't look great with cuts in the past. Since 2013, the annual payment back then was €0.75, compared to the most recent full-year payment of €0.30. The dividend has shrunk at around 8.8% a year during that period. Declining dividends isn't generally what we look for as they can indicate that the company is running into some challenges.
The Dividend Looks Likely To Grow
Dividends have been going in the wrong direction, so we definitely want to see a different trend in the earnings per share. Deutsche Bank has impressed us by growing EPS at 59% per year over the past five years. Earnings have been growing rapidly, and with a low payout ratio we think that the company could turn out to be a great dividend stock.
We Really Like Deutsche Bank's Dividend
In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. The earnings easily cover the company's distributions, and the company is generating plenty of cash. If earnings do fall over the next 12 months, the dividend could be buffeted a little bit, but we don't think it should cause too much of a problem in the long term. Taking this all into consideration, this looks like it could be a good dividend opportunity.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've picked out 1 warning sign for Deutsche Bank that investors should know about before committing capital to this stock. If you are a dividend investor, you might also want to look at our curated list of high yield 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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