Bayer - why the dividend yield is not everything
Bayer, a company with a long history and known for its dividend stability, has recently faced a number of challenges. The current enticing dividend yield may seem attractive at first glance, but it is worth taking a closer look to assess its long-term sustainability.
1. steady downward trend for Bayer: Things are currently on a steady downward trend for Bayer. The uncertainty regarding future financial developments raises questions about the long-term stability of the company. The share price performance reflects this and it remains to be seen whether this trend will continue.
2. the supposedly "attractive" dividend yield: Bayer's current dividend yield may seem impressive at first glance, based on the last payout of €2.4 per share. But caution is advised, as this yield is not necessarily forward-looking. A sustainable dividend policy requires not only past successes, but also clear prospects for future profits.
3. probable cut and alternative use of the money: A cut in Bayer's dividend seems likely given the current situation. It can be assumed that Bayer would like to use the money for urgently needed investments or debt reduction instead of continuing to distribute it generously as a dividend.
4. high dividend yield as a warning signal: It may seem paradoxical, but an extremely high dividend yield can also be an alarm signal for investors. An above-average yield often indicates that the market has little confidence in future share price performance. This can have various causes, including uncertainties about the company's business model, financial problems or specific sector risks.
My conclusion: When looking at Bayer, it is crucial to look beyond the dividend yield. It is advisable to carefully analyze the overall situation of the company and its long-term prospects in order to make informed investment decisions. In the current uncertainty, caution is advised and a comprehensive consideration of all relevant factors is essential.
Do you like these short articles? And what do you think of Bayer's current situation and how do you feel about high dividend yields in general?
Here's to evergreen portfolios!
Felix
#beststocks
