Berentzen-Gruppe (ETR:BEZ) Has Announced That It Will Be Increasing Its Dividend To €0.11

Berentzen-Gruppe Aktiengesellschaft (ETR:BEZ) has announced that it will be increasing its dividend from last year's comparable payment on the 28th of May to €0.11. The payment will take the dividend yield to 2.5%, which is in line with the average for the industry.

Our free stock report includes 2 warning signs investors should be aware of before investing in Berentzen-Gruppe. Read for free now.

Berentzen-Gruppe's Future Dividend Projections Seem Positive

We aren't too impressed by dividend yields unless they can be sustained over time. The company is paying out a large amount of its cash flows, even though it isn't generating any profit. This makes us feel that the dividend will be hard to maintain.

Looking forward, earnings per share is forecast to rise exponentially over the next year. If the dividend extends its recent trend, estimates say the dividend could reach 31%, which we would be comfortable to see continuing.

View our latest analysis for Berentzen-Gruppe

Berentzen-Gruppe's Dividend Has Lacked Consistency

Even in its relatively short history, the company has reduced the dividend at least once. This suggests that the dividend might not be the most reliable. The annual payment during the last 9 years was €0.20 in 2016, and the most recent fiscal year payment was €0.11. This works out to be a decline of approximately 6.4% per year over that time. Declining dividends isn't generally what we look for as they can indicate that the company is running into some challenges.

The Dividend Has Limited Growth Potential

Dividends have been going in the wrong direction, so we definitely want to see a different trend in the earnings per share. Berentzen-Gruppe's earnings per share has shrunk at 43% a year over the past five years. Dividend payments are likely to come under some pressure unless EPS can pull out of the nosedive it is in. It's not all bad news though, as the earnings are predicted to rise over the next 12 months - we would just be a bit cautious until this becomes a long term trend.

We're Not Big Fans Of Berentzen-Gruppe's Dividend

Overall, while the dividend being raised can be good, there are some concerns about its long term sustainability. The company seems to be stretching itself a bit to make such big payments, but it doesn't appear they can be consistent over time. Overall, this doesn't get us very excited from an income standpoint.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Just as an example, we've come across 2 warning signs for Berentzen-Gruppe you should be aware of, and 1 of them is a bit unpleasant. Is Berentzen-Gruppe not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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