Munich Munich Re raises the dividend significantly. The world’s largest reinsurer announced on Tuesday that shareholders can expect a distribution of eleven euros for the past year. Last year, 9.80 euros stood at this point.
With an increase of more than twelve percent, the Dax group is paying out a double-digit euro sum to its shareholders for the first time. In addition, the group is planning another share buyback program worth one billion euros, which is scheduled to start the day following the Annual General Meeting on April 29.
With the significant increase in dividends, the reinsurer has clearly exceeded analysts’ expectations. On average, 13 experts had expected a payout of EUR 10.43. “An attractive dividend policy remains a trademark of Munich Re,” said CEO Joachim Wenning. In relation to the share price of 257 euros on Tuesday, the payout corresponds to a dividend yield of almost 4.3 percent.
Internally at Munich Re, since the presentation of the Ambition 2025 strategy program, the target has been that the dividend should increase by at least five percent. In any case, the motto in the Group since 1970 has been: the dividend is increased in good times and remains at least at the previous year’s level in bad years.
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Profit target should be reached
This shows that the Munich insurer will at least achieve its targeted annual result of 2.8 billion euros, which will be published on Wednesday morning at 7.30 a.m. CFO Christoph Jurecka confirmed this goal once more in November.
On average, analysts expect a net profit of 2.889 billion euros. The fourth quarter alone is said to have contributed 825 million euros. It would be a return to the usual magnitude, following high flood damage in July in the Ahr Valley caused profits to drop to EUR 366 million in the third quarter.
The group is also reviving its traditional share buyback program. Shortly before the outbreak of the corona crisis, Munich Re had announced a buyback program of one billion euros in February 2020, but then suspended this at the end of March and made the decision in July not to implement it for good. With the resumption of buybacks, around 3.9 million shares would be canceled at the current price level.
More: Record dividends: Dax companies will pay out more than ever before