How Does KAS BANK NV (AMS:KA) Fare As A Dividend Stock?

Dividends play an important role in compounding returns in the long run and end up forming a sizeable part of investment returns. Historically, KAS BANK NV (AMS:KA) has paid a dividend to shareholders. It currently yields 6.6%. Let’s dig deeper into whether KAS BANK should have a place in your portfolio.

See our latest analysis for KAS BANK

How I analyze a dividend stock

When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:

  • Does it pay an annual yield higher than 75% of dividend payers?

  • Has it paid dividend every year without dramatically reducing payout in the past?

  • Has it increased its dividend per share amount over the past?

  • Is is able to pay the current rate of dividends from its earnings?

  • Will it be able to continue to payout at the current rate in the future?

ENXTAM:KA Historical Dividend Yield November 13th 18
ENXTAM:KA Historical Dividend Yield November 13th 18

Does KAS BANK pass our checks?

KAS BANK has a trailing twelve-month payout ratio of 66%, which means that the dividend is covered by earnings. Going forward, analysts expect KA’s payout to remain around the same level at 65% of its earnings, which leads to a dividend yield of 12%. Moreover, EPS should increase to €1.15.

When thinking about whether a dividend is sustainable, another factor to consider is the cash flow. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.

If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Not only have dividend payouts from KAS BANK fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. This means that dividend hunters should probably steer clear of the stock, at least for now until the track record improves.

In terms of its peers, KAS BANK produces a yield of 6.6%, which is high for Capital Markets stocks.

Next Steps:

Keeping in mind the dividend characteristics above, KAS BANK is definitely worth considering for investors looking to build a dedicated income portfolio. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. Below, I’ve compiled three fundamental aspects you should further research:

  1. Valuation: What is KA worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether KA is currently mispriced by the market.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on KAS BANK’s board and the CEO’s back ground.

  3. Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.