BMW reduces dividend by 12,5%

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Recently BMW announced a reduction of their dividend by €0,50. The dividend got reduced from €4,00 to €3,50.

I own 30 shares of BMW so my yearly estimated dividend income declined by €15. Dividend got reduced in line with the profit development. Payout ratio over 2018 is 32% whereas the payout over 2017 was 30,3%

Based on the cyclical nature of the automotive industry I understand that BMW is a position in my portfolio where times of dividend growth can stop for some time, although I not expected a cut this year already. Based on the relative low payout ratio of BMW I assumed a steady dividend.

As a result of the dividend reduction my yield on cost will now be 4,87%. I hold this position in my portfolio.

Purchase 30 shares BMW

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Today I purchased 30 shares BMW at a price of €71,75. I already had BMW for some time on my watchlist and I decided to buy 30 shares today. This also because the stocks are trading around a 52 week low. Due to the effect of trade war tariffs and exchange rates BMW is expecting pressure on their profitability.

As a result of the selloff on the stock exchanges this week I consider it a good moment to pick up a few BMW shares for the long term.

As a result of this purchase I add €120 to my yearly estimated dividend income. The current dividend per share is €4 so the current yield is 5,57%.