In just four days, Mercedes-Benz Group AG (ETR:MBG) stock will trade ex-dividend. Investors interested in the dividend payment of €5.20 per share must act before the 4th of May, as the payment is scheduled for the 8th of May. The company’s dividend yield stands at 7.4% based on the current share price of €70.58.
The payout ratio for Mercedes-Benz Group is a modest 38% of profit, indicating a sustainable dividend. Furthermore, dividends consumed only 54% of the company’s free cash flow last year, which is within a normal range for most dividend-paying organizations.
Mercedes-Benz Group’s earnings per share have grown by 7.1% per annum over the last five years, and its dividend has increased by approximately 9.0% a year on average in the last decade. Although the company has promising growth prospects and a history of increasing dividends, investors should be cautious, as the payout ratio may be raised if growth prospects slow.
While the upcoming dividend may tempt investors, it’s important to be aware of the risks involved, including the 3 warning signs we’ve identified for Mercedes-Benz Group. Careful analysis is crucial before making any investment decisions.
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