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The board of Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München (ETR:MUV2) has announced that the dividend on 6th of May will be increased to €20.00, which will be 33% higher than last year's payment of €15.00 which covered the same period. Despite this raise, the dividend yield of 2.5% is only a modest boost to shareholder returns.
Münchener Rückversicherungs-Gesellschaft in München's Projected Earnings Seem Likely To Cover Future Distributions
It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable. The last dividend was quite easily covered by Münchener Rückversicherungs-Gesellschaft in München's earnings. This indicates that quite a large proportion of earnings is being invested back into the business.
The next year is set to see EPS grow by 23.3%. 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.
Check out our latest analysis for Münchener Rückversicherungs-Gesellschaft in München
Münchener Rückversicherungs-Gesellschaft in München Has A Solid Track Record
The company has an extended history of paying stable dividends. The annual payment during the last 10 years was €7.75 in 2015, and the most recent fiscal year payment was €15.00. This works out to be a compound annual growth rate (CAGR) of approximately 6.8% a year over that time. 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
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. It's encouraging to see that Münchener Rückversicherungs-Gesellschaft in München has been growing its earnings per share at 18% a year over the past five years. Earnings are on the uptrend, and it is only paying a small portion of those earnings to shareholders.
Münchener Rückversicherungs-Gesellschaft in München Looks Like A Great Dividend Stock
Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Distributions are quite easily covered by earnings, which are also being converted to cash flows. Taking this all into consideration, this looks like it could be a good dividend opportunity.