Shareholders of Bank of Queensland (ASX:BOQ) are set to receive a larger dividend compared to last year.

April 19, 2025 04:31 PM AEST | By Team Kalkine Media

Shareholders of Bank of Queensland (ASX:BOQ) are set to receive a larger dividend compared to last year. — Image source: Shutterstock

Strong Earnings Coverage Expected

Bank of Queensland, an established ASX financial stock, has been distributing dividends for over a decade, showcasing a consistent commitment to returning earnings to shareholders. Currently, the payout ratio stands at a manageable 76%, indicating the company retains some flexibility for future allocations. The outlook appears promising, with analysts forecasting a 29.9% growth in earnings per share (EPS) over the next three years. Additionally, a slight adjustment in the payout ratio is anticipated, expected to decline to 70%, which would further reinforce the sustainability of its dividend policy

Analyzing Dividend Volatility

Despite its longstanding dividend record, there have been instances where dividends were reduced, the most recent being a drop from A$0.68 in 2015 to A$0.34 in the last fiscal year, a decline of around 6.7% per year. This trend might indicate underlying challenges, which could impact future dividend stability.

Challenges in Dividend Growth

Another important aspect to consider is the company's earnings trend. Over the past five years, Bank of Queensland has experienced a 3.3% annual decline in EPS. If this trend continues, it might force the company to make tough decisions regarding its dividend policy. However, there is a silver lining, as the forecast for the next year expects earnings to rise, a potential sign of recovery, although it's prudent to wait for a consistent upward trend.

In Conclusion

While the increase in dividends is generally positive, Bank of Queensland's overall position may not appeal to those focusing on income stability. The payout ratio, though improving, is slightly high, and past volatility adds elements of uncertainty. Investors typically prefer companies with steady and predictable dividend policies, and Bank of Queensland's fluctuations may not align with that preference.

Investors should also remain aware of any potential risks before making further investment decisions in Bank of Queensland. For a detailed analysis including fair value estimates, dividends, and insider trades, explore our free comprehensive report.

Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.