In This Article:
Quirin Privatbank AG (ETR:QB7) has announced that it will be increasing its periodic dividend on the 11th of June to €0.16, which will be 45% higher than last year's comparable payment amount of €0.11. This takes the annual payment to 3.1% of the current stock price, which is about average for the industry.
Quirin Privatbank Not Expected To Earn Enough To Cover Its Payments
We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue.
Quirin Privatbank has established itself as a dividend paying company, given its 8-year history of distributing earnings to shareholders. Past distributions do not necessarily guarantee future ones, but Quirin Privatbank's payout ratio of 59% is a good sign for current shareholders as this means that earnings decently cover dividends.
Over the next year, EPS could expand by 4.1% if the company continues along the path it has been on recently. Assuming the dividend continues along recent trends, we think the future payout ratio could reach 97%, which probably can't continue without starting to put some pressure on the balance sheet.
See our latest analysis for Quirin Privatbank
Quirin Privatbank's Dividend Has Lacked Consistency
It's comforting to see that Quirin Privatbank has been paying a dividend for a number of years now, however it has been cut at least once in that time. Due to this, we are a little bit cautious about the dividend consistency over a full economic cycle. Since 2017, the annual payment back then was €0.05, compared to the most recent full-year payment of €0.11. This works out to be a compound annual growth rate (CAGR) of approximately 10% a year over that time. Dividends have grown rapidly over this time, but with cuts in the past we are not certain that this stock will be a reliable source of income in the future.
The Dividend's Growth Prospects Are Limited
Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. However, Quirin Privatbank has only grown its earnings per share at 4.1% per annum over the past three years. Growth of 4.1% per annum is not particularly high, which might explain why the company is paying out a higher proportion of earnings. This isn't necessarily bad, but we wouldn't expect rapid dividend growth in the future.
In Summary
Overall, we always like to see the dividend being raised, but we don't think Quirin Privatbank will make a great income stock. The low payout ratio is a redeeming feature, but generally we are not too happy with the payments Quirin Privatbank has been making. This company is not in the top tier of income providing stocks.