6.23% dividend for a DAX share? Almost only she can do that alliance (WKN: 840400). It is striking if we calculate the current conditions. With a dividend of 10.80 euros last paid and a current share price of 173.22 euros, we get this value. It’s not that big of a surprise.
Some investors are currently pondering: Is it possible that this DAX stock is worth the risk? In any case, we can quantify the opportunity very well based on the more than 6% yield. Also a price-to-book ratio of probably less than 1 and a price-to-earnings ratio of less than 10 if we leave out the final special effects, some of which are expensive.
What hardly anyone is considering at the moment is that Allianz stock should allow for even more dividends in the coming years. If we throw it out into the balance, we actually see quite quickly that the option seems attractive.
Allianz stock: More than 6.23% dividend?
It may be unthinkable at the moment, but according to the forecast and the distribution policy of the Allianz share, there should be even more dividends. Dividend growth and such a high yield of over 6% can become the total package relevant to foolish investors.
The secret is the targeted earnings growth that the DAX share has promised. It remains to be seen which special effects will still weigh on the numbers during this year. For example, stopped in Russia or storms at the beginning of the year. But Allianz stock is actually aiming to deliver earnings growth of between 5% and 7% through the end of 2024.
According to the dividend policy, the dividend per share also grow by at least 5% per year. This means that the dividend yield could even rise to 6.5% and higher within the next few years. Without a doubt, a perspective that does not seem to be priced.
Of course, it remains to be seen whether the management sees operational room for maneuver in the coming year or not. But Allianz is and will remain a strong DAX share with an attractive dividend. And best of all: growth is definitely possible.
Not priced into the DAX share
The DAX share has a clear focus and a cheap, fundamental valuation. 6.23% yield is the current situation and part of the cheap valuation target that is obvious. But there is more to it than that. Yes, even some dividend growth if management delivers as recently announced.
But the crux of the matter is that the medium-term forecasts are similarly good. Share buybacks and other factors may also increase the dividend sooner or later. That’s a scenario I don’t see appealingly valued in a short-term market.
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Vincent owns shares in Allianz. The Motley Fool does not own any of the stocks listed.