Stock Analysis

Wüstenrot & Württembergische (ETR:WUW) Has Affirmed Its Dividend Of €0.65

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The board of Wüstenrot & Württembergische AG (ETR:WUW) has announced that it will pay a dividend on the 26th of May, with investors receiving €0.65 per share. This means the dividend yield will be fairly typical at 4.0%.

Check out our latest analysis for Wüstenrot & Württembergische

Wüstenrot & Württembergische's Earnings Easily Cover The Distributions

We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue. However, prior to this announcement, Wüstenrot & Württembergische's dividend was comfortably covered by both cash flow and earnings. This means that most of what the business earns is being used to help it grow.

Looking forward, earnings per share is forecast to fall by 5.9% over the next year. If the dividend continues along recent trends, we estimate the payout ratio could be 24%, which we consider to be quite comfortable, with most of the company's earnings left over to grow the business in the future.

XTRA:WUW Historic Dividend April 3rd 2023

Wüstenrot & Württembergische Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2013, the dividend has gone from €0.50 total annually to €0.65. This means that it has been growing its distributions at 2.7% per annum over that time. Slow and steady dividend growth might not sound that exciting, but dividends have been stable for ten years, which we think makes this a fairly attractive offer.

Wüstenrot & Württembergische May Find It Hard To Grow The Dividend

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. However, Wüstenrot & Württembergische's EPS was effectively flat over the past five years, which could stop the company from paying more every year. While growth may be thin on the ground, Wüstenrot & Württembergische could always pay out a higher proportion of earnings to increase shareholder returns.

Wüstenrot & Württembergische Looks Like A Great Dividend Stock

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. The distributions are easily covered by earnings, and there is plenty of cash being generated as well. We should point out that the earnings are expected to fall over the next 12 months, which won't be a problem if this doesn't become a trend, but could cause some turbulence in the next year. All in all, this checks a lot of the boxes we look for when choosing an income stock.

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. For example, we've picked out 1 warning sign for Wüstenrot & Württembergische that investors should know about before committing capital to this stock. Is Wüstenrot & Württembergische not quite the opportunity you were looking for? Why not check out our selection of top 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.