Berliner Effektengesellschaft (FRA:BFV) Will Pay A Dividend Of €0.50

The board of Berliner Effektengesellschaft AG (FRA:BFV) has announced that it will pay a dividend on the 18th of June, with investors receiving €0.50 per share. The dividend yield is 0.7% based on this payment, which is a little bit low compared to the other companies in the industry.

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Berliner Effektengesellschaft's Earnings Will Easily Cover The Distributions

While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible.

Berliner Effektengesellschaft 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 Berliner Effektengesellschaft's payout ratio of 51% is a good sign as this means that earnings decently cover dividends.

If the trend of the last few years continues, EPS will grow by 4.5% over the next 12 months. If the dividend continues on this path, the future payout ratio could be 51% by next year, which we think can be pretty sustainable going forward.

See our latest analysis for Berliner Effektengesellschaft

Dividend Volatility

The company has a long dividend track record, but it doesn't look great with cuts in the past. The annual payment during the last 10 years was €0.21 in 2015, and the most recent fiscal year payment was €0.50. This means that it has been growing its distributions at 9.1% per annum over that time. It's good to see the dividend growing at a decent rate, but the dividend has been cut at least once in the past. Berliner Effektengesellschaft might have put its house in order since then, but we remain cautious.

The Dividend's Growth Prospects Are Limited

Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. Earnings has been rising at 4.5% per annum over the last five years, which admittedly is a bit slow. The company has been growing at a pretty soft 4.5% per annum, and is paying out quite a lot of its earnings to shareholders. This isn't necessarily bad, but we wouldn't expect rapid dividend growth in the future.

In Summary

In summary, we are pleased with the dividend remaining consistent, and we think there is a good chance of this continuing in the future. While the payout ratios are a good sign, we are less enthusiastic about the company's dividend record. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.

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. Just as an example, we've come across 2 warning signs for Berliner Effektengesellschaft you should be aware of, and 1 of them shouldn't be ignored. 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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