Glarner Kantonalbank (VTX:GLKBN) Will Pay A Smaller Dividend Than Last Year

Glarner Kantonalbank (VTX:GLKBN) is reducing its dividend from last year's comparable payment to CHF1.00 on the 2nd of May. This means the annual payment is 4.4% of the current stock price, which is above the average for the industry.

Glarner Kantonalbank's Dividend Forecasted To Be Well Covered By Earnings

A big dividend yield for a few years doesn't mean much if it can't be sustained.

Glarner Kantonalbank has a long history of paying out dividends, with its current track record at a minimum of 10 years. Past distributions do not necessarily guarantee future ones, but Glarner Kantonalbank's payout ratio of 56% is a good sign as this means that earnings decently cover dividends.

EPS is set to fall by 3.9% over the next 12 months if recent trends continue. However, the future payout ratio is forecasted by analysts to be56% in 3 years, which is still feasible to continue.

Check out our latest analysis for Glarner Kantonalbank

Glarner Kantonalbank Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2015, the annual payment back then was CHF0.60, compared to the most recent full-year payment of CHF1.00. This implies that the company grew its distributions at a yearly rate of about 5.2% over that duration. The growth of the dividend has been pretty reliable, so we think this can offer investors some nice additional income in their portfolio.

Dividend Growth May Be Hard To Achieve

The company's investors will be pleased to have been receiving dividend income for some time. Unfortunately things aren't as good as they seem. Glarner Kantonalbank has seen earnings per share falling at 3.9% per year over the last five years. If the company is making less over time, it naturally follows that it will also have to pay out less in dividends.

In Summary

Overall, while it's not great to see that the dividend has been cut, we think the company is now in a good position to make consistent payments going into the future. While the payments look sustainable for now, earnings have been shrinking so the dividend could come under pressure in the future. The dividend looks okay, but there have been some issues in the past, so we would be a little bit cautious.

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 Glarner Kantonalbank 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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