Assessing the Upcoming Dividend and Historical Performance of ABN AMRO Bank NV
ABN AMRO Bank NV (AAVMY, Financial) recently announced a dividend of $0.96 per share, payable on 2024-06-11, with the ex-dividend date set for 2024-04-26. 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 ABN AMRO Bank NV's dividend performance and assess its sustainability.
What Does ABN AMRO Bank NV Do?
ABN AMRO Bank is a Dutch bank, and the Netherlands accounts for around 90% of its operating profit. Operationally, retail and commercial banking contributes the majority of its operating profit, while ABN AMRO continues to reduce its exposure to corporate and investment banking. It views private banking as one of its key growth areas.
A Glimpse at ABN AMRO Bank NV's Dividend History
ABN AMRO Bank NV has maintained a consistent dividend payment record since 2021. Dividends are currently distributed on a bi-annual basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down ABN AMRO Bank NV's Dividend Yield and Growth
As of today, ABN AMRO Bank NV currently has a 12-month trailing dividend yield of 8.14% and a 12-month forward dividend yield of 9.50%. This suggests an expectation of an increased dividend payout over the next 12 months. Additionally, based on ABN AMRO Bank NV's dividend yield and five-year growth rate, the 5-year yield on cost of ABN AMRO Bank NV stock as of today is approximately 8.14%.
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, ABN AMRO Bank NV's dividend payout ratio is 0.41. ABN AMRO Bank NV's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks ABN AMRO Bank NV'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. ABN AMRO Bank NV'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 ABN AMRO Bank NV's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. ABN AMRO Bank NV's revenue has increased by approximately 6.50% per year on average, a rate that underperforms approximately 51.96% of global competitors.
Next Steps
In conclusion, while ABN AMRO Bank NV (AAVMY, Financial) presents an attractive dividend yield, investors must consider the underlying factors such as the payout ratio, profitability, and growth metrics before making investment decisions. The current payout ratio appears manageable, but the company's moderate profitability rank and growth prospects may raise concerns about the long-term sustainability of the dividend. Value investors should weigh these elements against their investment strategy and risk tolerance. For those seeking high-dividend yield stocks, GuruFocus Premium offers a comprehensive High Dividend Yield Screener tool to discover potential opportunities.
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.
