Assessing the Sustainability of Banca Mediolanum's Upcoming Dividend
Banca Mediolanum (BNCDY, Financial) recently announced a dividend of $0.6 per share, payable on 2023-12-07, with the ex-dividend date set for 2023-11-22. 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 Banca Mediolanum's dividend performance and assess its sustainability.
What Does Banca Mediolanum Do?
Banca Mediolanum is an Italy-based company which provides banking and financial services. It operates with various segments namely Lending which includes Retail and Commercial Banking, Treasury activities which has trading and sales, Asset Management and Retail Brokerage. The company offers current accounts, mortgages and loan products; credit, debit, and rechargeable cards and investment products. Geographically, it operates the market of Italy, Spain, and Germany of which Italy accounts for a larger share of revenue.
A Glimpse at Banca Mediolanum's Dividend History
Banca Mediolanum has maintained a consistent dividend payment record since 2021. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Banca Mediolanum's Dividend Yield and Growth
As of today, Banca Mediolanum currently has a 12-month trailing dividend yield of 5.97% and a 12-month forward dividend yield of 6.56%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Banca Mediolanum's annual dividend growth rate was 4.70%. Based on Banca Mediolanum's dividend yield and five-year growth rate, the 5-year yield on cost of Banca Mediolanum stock as of today is approximately 5.97%.
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 2023-09-30, Banca Mediolanum's dividend payout ratio is 0.52. Banca Mediolanum's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Banca Mediolanum's profitability 5 out of 10 as of 2023-09-30, suggesting fair profitability. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Banca Mediolanum's growth rank of 5 out of 10 suggests that the company has a fair growth outlook. Revenue is the lifeblood of any company, and Banca Mediolanum's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Banca Mediolanum's revenue has decreased by approximately -37.00% per year on average, a rate that underperforms approximately 99.01% of global competitors. The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Banca Mediolanum's earnings decreased by approximately -2.10% per year on average, a rate that underperforms approximately 81.21% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 16.40%, which underperforms approximately 24.85% of global competitors.
Next Steps
Considering Banca Mediolanum's dividend payments, dividend growth rate, payout ratio, profitability, and growth metrics, investors should weigh these factors when evaluating the company's long-term dividend sustainability. While the current yield is attractive, the negative revenue and EPS growth rates present concerns that may warrant further investigation. Investors may consider the company's strategic plans and market position to better understand its future potential. For those seeking 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.
