Our analysis is based on comparing Banco Bradesco SA with the following peers – Itau Unibanco Holding S.A. Sponsored ADR Pfd, Canadian Imperial Bank of Commerce, Royal Bank of Canada, Banco Bilbao Vizcaya Argentaria, S.A. Sponsored ADR, Mitsubishi UFJ Financial Group, Inc. Sponsored ADR, HSBC Holdings plc Sponsored ADR and Banco de Chile Sponsored ADR (ITUB-US, CM-US, RY-US, BBVA-US, MTU-US, HSBC-US and BCH-US).
Banco Bradesco SA’s dividend yield is 1.51 percent and its dividend payout is 7.59 percent. This compares to a peer average dividend yield of 3.22 percent and a payout level of 42.07 percent. This relatively lagging dividend performance could spur some dividend action going forward – as long as the company’s relatively strong dividend quality score of 67 out of a possible score of 100 looks sustainable.
Dividend Quality Overview
- Over the last twelve months (prior to June 30, 2017), BBD-US paid a medium quality dividend, which represents a yield of 0.49% at the current price.
- Dividend quality trend has not been consistent over the last five years. Dividends were paid during each of these years — of these 2 were high quality, 2 were medium quality and 1 was low quality.
- The ending cash balance, with a dividend coverage of 15.05x, provides a substantial cushion in case of a significant reduction of cash flows in the future.
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Over the last twelve months (prior to June 30, 2017), BBD-US paid a medium quality dividend.
The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 13.37x), investing cash flow (coverage of -9.12x), issuance cash flow (coverage of -0.37x) and twelve-month prior cash (coverage of 15.01x), for a total dividend coverage of 16.05x.
BBD-US’s issuance cash flow includes outflows from net debt repayment (coverage of -3.95x) and net share buybacks (coverage of -7.34E-5x). Thus, the total coverage including share buybacks is 16.05x, which reflects our assumption that the cash paid for share buybacks is discretionary and could instead be used to pay dividends.
These coverage ratio factors imply that the firm’s net cash inflow from issuance was required (in addition to operating and investment cash) to pay the dividend, which suggests a medium dividend quality.
|Dividend Yield (%)||5.79||7.4||5.95||12.09||6.76||1.51|
|Dividend Payout (%)||28.29||9.7||17.15||15.14||6.82||7.59|
A complete list of metrics and analysis is available on the company page.
Banco Bradesco SA operates as an international bank. It offers banking and financial products and services. The company operates through two segments: Banking, and Insurance, Pension & Capitalization Bonds. The Banking segment includes individuals and small, midsized, and large companies in Brazil. The Insurance, Pension & Capitalization Bonds segment offers products which include health, life, personal accident, automobile, and other assets. Banco Bradesco was founded by Amador Aguiar on March 10, 1943 and is headquartered in Osasco, Brazil.
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