Exploring the Sustainability and Growth of Mediobanca SpA's Dividends

Mediobanca SpA (MDIBY) recently announced a dividend of $0.55 per share, payable on an unspecified future date, with the ex-dividend date set for 2024-05-23. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Utilizing data from GuruFocus, this analysis delves into Mediobanca SpA's dividend performance and assesses its sustainability.

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Mediobanca SpA is an Italian banking group, initially established as a pure investment bank. It operates through three main units: corporate and investment banking, consumer finance, and wealth management. Historically, Mediobanca had a significant portfolio of equity investments in some of its clients. Following a period of aggressive asset sales in its principal investments division, its stake in Italy's insurer, Generali, now constitutes the majority of Mediobanca's principal investments portfolio.

A Glimpse at Mediobanca SpA's Dividend History

Mediobanca SpA has maintained a consistent dividend payment record since 2021, distributing dividends on a yearly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.

Breaking Down Mediobanca SpA's Dividend Yield and Growth

Currently, Mediobanca SpA boasts a 12-month trailing dividend yield of 5.54% and a 12-month forward dividend yield of 3.31%, indicating an expected decrease in dividend payments over the next year. Over the past three years, Mediobanca SpA's annual dividend growth rate was 16.90%. The 5-year yield on cost of Mediobanca SpA stock, as of today, is approximately 5.54%.

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. As of 2023-12-31, Mediobanca SpA's dividend payout ratio is 0.80, suggesting a potential risk to dividend sustainability. Additionally, Mediobanca SpA's profitability rank is 6 out of 10, indicating fair profitability with consistent positive net income over the past decade.

Growth Metrics: The Future Outlook

Mediobanca SpA's growth rank of 6 suggests a fair growth outlook. The company's revenue per share and 3-year revenue growth rate of 8.60% per year on average outperforms approximately 57.07% of global competitors. Furthermore, Mediobanca SpA's 3-year EPS growth rate of 16.90% per year and 5-year EBITDA growth rate of 7.00% also showcase strong performance relative to peers.