Yahoo Finance Commerzbank AG's Dividend Analysis
An In-depth Look at Upcoming Dividends and Financial Health
Introduction to Commerzbank AG's Dividend
Commerzbank AG (CRZBY) recently announced a dividend of $0.38 per share, payable on 2024-05-16, with the ex-dividend date set for 2024-05-02. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Commerzbank AG's dividend performance and assess its sustainability.
What Does Commerzbank AG Do?
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Commerzbank operates primarily in Europe, with Germany contributing about 70% to its total income. The bank operates two business segments: private and small-business customers, and corporate clients. In its private and small-business segment, the group runs its branch business, a mobile bank focused on the Polish market, an online broker, and an asset manager for physical assets. Its corporate client business provides cash management and trade finance solutions to small and medium-sized enterprises and large corporates.
A Glimpse at Commerzbank AG's Dividend History
Commerzbank AG has maintained a consistent dividend payment record since 2023, with dividends currently distributed on a yearly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Commerzbank AG's Dividend Yield and Growth
As of today, Commerzbank AG currently has a 12-month trailing dividend yield of 1.41% and a 12-month forward dividend yield of 2.49%. This suggests an expectation of increased dividend payments over the next 12 months. Commerzbank AG's dividend yield of 1.41% is near a 10-year low and underperforms 89.9% of global competitors in the Banks industry, suggesting that the company's dividend yield may not be a compelling proposition for income investors.
Based on Commerzbank AG's dividend yield and five-year growth rate, the 5-year yield on cost of Commerzbank AG stock as of today is approximately 1.41%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, Commerzbank AG's dividend payout ratio is 0.11.
Commerzbank AG's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Commerzbank AG's profitability 4 out of 10 as of 2023-12-31, suggesting the dividend may not be sustainable. The company has reported net profit in 9 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Commerzbank AG's growth rank of 4 out of 10 suggests that the company has poor growth prospects and thus, the dividend may not be sustainable. Revenue is the lifeblood of any company, and Commerzbank AG's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Commerzbank AG's revenue has increased by approximately 10.70% per year on average, a rate that outperforms approximately 64.91% of global competitors.
Conclusion: Evaluating Commerzbank AG's Dividend Outlook
Considering Commerzbank AG's latest dividend announcement, historical performance, and financial health, investors should weigh the potential for future dividend growth against the current low yields and profitability concerns. With a robust revenue model but modest growth prospects, the sustainability of dividends could be challenging unless there are significant improvements in profitability or payout ratios. For those interested in exploring more high-dividend yield opportunities, GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
