Interim dividend Flow Traders up 350%

This week Flow Traders (EPA:FLOW) did go ex-dividend. The interim dividend is up from €0,30 to €1,35 this year. This is increasing my estimated yearly dividend income with €52,50.

Flow Traders (EPA:FLOW) is a market maker mainly active in ETF’s. As a result of the high volatility in the market in Q1 the net profit increased a lot and due to the increased profit the dividend was increased. The Q1 net profit was up 705%. The volatility decreased a lot in Q2 and this results in less trading income. The half year net profit is up 386% from previous year.

I don’t consider Flow Traders a dividend growth stock, because it’s results are very dependent on the volatility in the market.

Yield on cost is 5,24%, but with current volatility I don’t expect this to increase. A decrease in dividend for next year is more likely. I bought this stock initially with the assumption to benefit from high volatility in Q2 also, but with the current relatively calm markets I have to reconsider if it’s worth holding Flow Traders (EPA:FLOW), but at the same time it’s hard to decide if it’s a easy sell, because I of course can’t predict when volatility is comming back.

Purchase 50 shares Flow Traders

This week I bought 50 shares of Flow Traders at a price of €32,44 per share. Current yearly dividend is €0,65 per share so with this purchase I add €32,50 to my yearly estimated dividend income.

Flow Traders is liquidity provider specialized in exchange traded products. I bought the shares of this company, because I expect that they will continue to benefit from the current volitility on the stock exchanges. The income of Flow Traders is mainly the spread between the bid and sell rate of exchange traded products. Due to the recent volatility in the market the first quarter net profit increased from €13,6 million 1Q17 to €109,7 million in 1Q18. This and EPS of €2,36 which brings the PE ratio just based on the Q1 results on 13,7.

I expect that the stock exchanges stay volatile for some more months at least and expect Flow Traders to be a good addition to my share portfolio. Although this stock will be cyclical and EPS will vary a lot based on volumes on the various exchanges where Flow Traders is active.

Yield on cost with the current dividend will be 2,00%.