Bankinter SA (BKIMF): A Comprehensive Analysis of Its Dividend Performance
Unveiling the Dividend History, Yield, and Sustainability of Bankinter SA (BKIMF)
Bankinter SA (BKIMF) recently announced a dividend of $0.13 per share, payable on 2023-09-27, with the ex-dividend date set for 2023-09-25. As investors eagerly anticipate this forthcoming payment, the spotlight also illuminates the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's delve into Bankinter SAs dividend performance and evaluate its sustainability.
Overview of Bankinter SA
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Primarily operating in Spain, Bankinter SA is a banking institution offering services like financial planning, asset management, retail banking, corporate banking, treasury, and international banking. The majority of earning assets on the balance sheet are customer loans. The bank's strategy focuses on innovation, organic and acquisitive growth, including international expansion, starting with Portugal. This expansion aims to diversify its revenue base from traditional spread lending to fee and commission income from private banking and asset management. Consequently, the company has placed an increasingly greater emphasis on corporate banking and higher-margin consumer finance.
A Snapshot of Bankinter SA's Dividend History
Since 2021, Bankinter SA has maintained a consistent dividend payment record, with dividends currently distributed on a quarterly basis. The chart below shows the annual Dividends Per Share for tracking historical trends.
Exploring Bankinter SA's Dividend Yield and Growth
As of today, Bankinter SA currently boasts a 12-month trailing dividend yield of 5.58% and a 12-month forward dividend yield of 6.78%, suggesting an expected increase in dividend payments over the next 12 months.
Over the past three years, Bankinter SA's annual dividend growth rate was -1.50%. This rate decreased to -3.20% per year when extended to a five-year horizon. However, over the past decade, Bankinter SA's annual dividends per share growth rate stands at 9.90%. As of today, based on Bankinter SA's dividend yield and five-year growth rate, the 5-year yield on cost of Bankinter SA stock is approximately 4.74%.
Assessing Dividend Sustainability: Payout Ratio and Profitability
Assessing the sustainability of the dividend necessitates evaluating 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 2023-06-30, Bankinter SA's dividend payout ratio is 0.43.
Bankinter SA's profitability rank, as of 2023-06-30, is 4 out of 10, suggesting the dividend may not be sustainable. However, the company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Future Outlook: Growth Metrics
Robust growth metrics are crucial for ensuring the sustainability of dividends. Bankinter SA's growth rank of 4 out of 10 suggests that the company has poor growth prospects and thus, the dividend may not be sustainable. However, Bankinter SA's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Bankinter SA's revenue has increased by approximately 8.70% per year on average, outperforming approximately 62.41% 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, Bankinter SA's earnings increased by approximately 7.60% per year on average, outperforming approximately 47.65% of global competitors. However, the company's 5-year EBITDA growth rate of -3.80% outperforms approximately 14.87% of global competitors.
Conclusion
While Bankinter SA has consistently paid dividends since 2021, the sustainability of these payments is questionable given the company's payout ratio, profitability, and growth metrics. Despite having a strong revenue model and a decent EPS growth rate, the company's low growth and profitability ranks may pose a risk to future dividend payments. Thus, investors should tread carefully and consider these factors while making investment decisions.
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This article first appeared on GuruFocus.
