Yahoo Finance Deutsche Bank (ETR:DBK) Is Paying Out A Larger Dividend Than Last Year
Deutsche Bank Aktiengesellschaft (ETR:DBK) has announced that it will be increasing its dividend from last year's comparable payment on the 21st of May to €0.45. This will take the dividend yield to an attractive 3.3%, providing a nice boost to shareholder returns.
Check out our latest analysis for Deutsche Bank
Deutsche Bank's Earnings Will Easily Cover The Distributions
We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable.
Deutsche Bank has a long history of paying out dividends, with its current track record at a minimum of 10 years. Using data from its latest earnings report, Deutsche Bank's payout ratio sits at 16%, an extremely comfortable number that shows that it can pay its dividend.
Over the next 3 years, EPS is forecast to fall by 4.8%. Despite that, analysts estimate the future payout ratio could be 39% over the same time period, which is in a pretty comfortable range.
Dividend Volatility
The company's dividend history has been marked by instability, with at least one cut in the last 10 years. The annual payment during the last 10 years was €0.75 in 2014, and the most recent fiscal year payment was €0.45. Doing the maths, this is a decline of about 5.0% per year. 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
With a relatively unstable dividend, it's even more important to see if earnings per share is growing. Deutsche Bank has impressed us by growing EPS at 65% 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.
Deutsche Bank Looks Like A Great Dividend Stock
Overall, a dividend increase is always good, and we think that Deutsche Bank is a strong income stock thanks to its track record and growing earnings. The company is generating plenty of cash, and the earnings also quite easily cover the distributions. 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.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've identified 2 warning signs for Deutsche Bank (1 shouldn't be ignored!) that you should be aware of before investing. 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.
