Münchener Rückversicherungs-Gesellschaft in München (ETR:MUV2) Is Paying Out A Larger Dividend Than Last Year

Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München (ETR:MUV2) has announced that it will be increasing its periodic dividend on the 6th of May to €20.00, which will be 33% higher than last year's comparable payment amount of €15.00. Even though the dividend went up, the yield is still quite low at only 2.6%.

Münchener Rückversicherungs-Gesellschaft in München's Projected Earnings Seem Likely To Cover Future Distributions

Even a low dividend yield can be attractive if it is sustained for years on end. Prior to this announcement, Münchener Rückversicherungs-Gesellschaft in München's dividend was comfortably covered by both cash flow and earnings. This indicates that quite a large proportion of earnings is being invested back into the business.

Looking forward, earnings per share is forecast to rise by 23.3% over the next year. If the dividend continues along recent trends, we estimate the payout ratio will be 40%, which is in the range that makes us comfortable with the sustainability of the dividend.

View our latest analysis for Münchener Rückversicherungs-Gesellschaft in München

Münchener Rückversicherungs-Gesellschaft in München Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2015, the annual payment back then was €7.75, compared to the most recent full-year payment of €15.00. This implies that the company grew its distributions at a yearly rate of about 6.8% over that duration. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. Münchener Rückversicherungs-Gesellschaft in München has seen EPS rising for the last five years, at 18% per annum. The company is paying a reasonable amount of earnings to shareholders, and is growing earnings at a decent rate so we think it could be a decent dividend stock.

Münchener Rückversicherungs-Gesellschaft in München Looks Like A Great Dividend Stock

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. Taking this all into consideration, this looks like it could be a good dividend opportunity.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Earnings growth generally bodes well for the future value of company dividend payments. See if the 11 Münchener Rückversicherungs-Gesellschaft in München analysts we track are forecasting continued growth with our free report on analyst estimates for the company. 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.