Munich Re: Dividend Machine

Munich Re the biggest Reinsurance in the world, is an amazing revenue generator.

Some history

In the last 30 years, it went from distributing 30m€ to 1.3B€ and it also repurchased 30% of its own shares in the last 10 years.

Below, you can see some chart published in Munich Re website:

Shares Buyback

• 1990 to 2000: dividend amount grew 7 times
• 2000 to 2010: dividend amount grew 5 times
• 2010 till 2015: dividend amount grew 20% but the number of shares declined by 30%.
• this year might reduce the number of shares by 4%!!!

Dividend Projection

In ten years from now we could have 110M shares (30% less) with probably more than 2.5B€ dividend distributed (very conservative number considering that today their Net Profit is already higher than 3B€). This could generate 22€ dividend per share vs today’s 8.3€ dividend.

on top, if you could reinvest your dividend (around 5%) every year, your dividend in 2026 will be 25% of your initial investment

With 15K€ investment you could buy today around 100 shares. Reinvesting the dividend, you could reach 170 shares in 10 years and 5.000€ dividend in 2016.

 

Disclosure: I am long MUV2