Banco di Desio e della Brianza's (BIT:BDB) Dividend Will Be Increased To €0.1969

Banco di Desio e della Brianza S.p.A. (BIT:BDB) has announced that it will be increasing its dividend from last year's comparable payment on the 10th of May to €0.1969. This takes the dividend yield to 5.6%, which shareholders will be pleased with.

Check out our latest analysis for Banco di Desio e della Brianza

Banco di Desio e della Brianza's Dividend Forecasted To Be Well Covered By Earnings

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained.

Banco di Desio e della Brianza has a long history of paying out dividends, with its current track record at a minimum of 10 years. Based on Banco di Desio e della Brianza's last earnings report, the payout ratio is at a decent 25%, meaning that the company is able to pay out its dividend with a bit of room to spare.

If the trend of the last few years continues, EPS will grow by 12.6% over the next 12 months. If the dividend continues on this path, the future payout ratio could be 31% by next year, which we think can be pretty sustainable going forward.

Dividend Volatility

Although the company has a long dividend history, it has been cut at least once in the last 10 years. The annual payment during the last 10 years was €0.105 in 2013, and the most recent fiscal year payment was €0.1969. This works out to be a compound annual growth rate (CAGR) of approximately 6.5% a year over that time. We have seen cuts in the past, so while the growth looks promising we would be a little bit cautious about its track record.

The Dividend Looks Likely To Grow

With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. It's encouraging to see that Banco di Desio e della Brianza has been growing its earnings per share at 13% a year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Banco di Desio e della Brianza's prospects of growing its dividend payments in the future.

We Really Like Banco di Desio e della Brianza's Dividend

Overall, a dividend increase is always good, and we think that Banco di Desio e della Brianza is a strong income stock thanks to its track record and growing earnings. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.

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. Taking the debate a bit further, we've identified 1 warning sign for Banco di Desio e della Brianza that investors need to be conscious of moving forward. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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