Vienna Insurance Group plans to never lower its dividend again. Is this a smart investment? Here is the analysis.

Vienna Insurance Group plans to never lower its dividend again. Is this a smart investment? Here is the analysis.

According to a report by www.boerse-online.de, the Austrian Vienna Insurance Group plans to never lower its dividend again, even if profits decline. To achieve this, the company wants to pay out at least the dividend from the previous year in the future and continuously increase it depending on operating profit. The insurance group's dividend prospects are rated positively, but potential investors should also take some risks into account.

According to company information, the Vienna Insurance Group will no longer reduce its dividend if profits decline. This move aims to provide shareholders with stable and increasing returns. To achieve this, the company plans to pay out at least the dividend from the previous year and to continuously increase it, depending on operating profit.

However, aside from the positive outlook, investors should consider the potential risks. Paying an unfunded dividend could have a long-term negative impact on the company as important investments may be withheld. A similar scenario can be seen with other companies such as the chemical companies Bayer and BASF, which pay their dividends but could potentially invest them better in the future of the company.

In terms of investment, Vienna Insurance Group appears to be visually attractive with a P/E ratio of 7.2 and a dividend yield of 5.3 percent. Still, potential investors should be critical of the company's self-imposed dividend dogma. It should also be noted that Allianz, an industry leader, is only slightly more expensive with a P/E ratio of 9 and a dividend yield of 5.6 percent. Allianz also has a large asset management business, making it an interesting alternative. Interested investors should therefore carefully examine Vienna Insurance Group shares and, if necessary, compare them with other investment options.