Monthly Dividend Stock In Focus: Banco Bradesco S.A. - Sure Dividend

Sure Dividend

High-Quality Dividend Stocks, Long-Term Plan
The Sure Dividend Investing MethodMember's Area

Monthly Dividend Stock In Focus: Banco Bradesco S.A.

Updated on April 20th, 2022 by Quinn Mohammed

Most stocks that pay dividends do so on a quarterly, semi-annual, or annual basis. But there is a small group of stocks that pay their dividends on a monthly basis. Monthly dividend stocks are naturally appealing for investors, as they make 12 dividend payouts to shareholders each year.

Monthly dividend stocks are equally rare when it comes to international dividend stocks. Banco Bradesco S.A. (BBD) is a monthly dividend stock with a yield above 4%.

You can download our full Excel list of 50 monthly dividend stocks (along with important metrics like dividend yields and payout ratios) by clicking on the link below:


Of course, investors should exercise caution when it comes to monthly dividend stocks. As always, investors should evaluate the company based on its business model strength, competitive advantages, and growth potential before buying shares.

This article will discuss Banco Bradesco in greater detail.

Business Overview

Banco Bradesco is a financial services company based in Brazil. It offers various banking products and financial services to individuals, corporations, and businesses in Brazil and internationally. The company’s two main segments are banking and insurance, including checking and savings accounts, demand deposits, time deposits, as well as accident and property insurance products and investment products. The company generates around $20 billion in annual revenue.

The 2020 COVID-19 pandemic year was very difficult for Banco Bradesco, as the global economy was negatively impacted by the coronavirus pandemic. Fortunately, 2021 was a year of recovery for banks such as Banco Bradesco, which have benefited from the return to economic growth.

Source: Investor Presentation

On February 9th, 2022, Banco Bradesco reported its Q4 and FY2021 results. The banking segment’s net interest income was $3.20 billion for the quarter, representing 1.8% growth year-over-year. Income from insurance grew 54.6% year-over-year due to last year’s adversely impacted results related to COVID-19. The company’s client base remained rather stable during the quarter.

Net income ended at $1.25 billion, 2.8% lower than Q4-2020, due to higher operating and tax expenses. However, for the full year, net income grew by 34.7% to a record $4.96 billion.

Management has provided FY2022 guidance, which includes 10% to 14% loan portfolio expansion and 2% to 6% growth in fees and commission income. This leads to an estimated FY2022 EPS of $0.42.

We’ll now take a look at Banco Bradesco’s growth prospects in detail.

Growth Prospects

Banco Bradesco’s earnings-per-share growth has been improving gradually in constant currency but has shown as flat or reduced over the years when converted in USD, due to BRL/USD depreciation. Foreign exchange risk is a major consideration for U.S. investors when buying international stocks.

That said, the company has been successful in generating organic growth. In Q4, the company reported it expanded its loan portfolio to $153.8 billion, for 18.3% growth year-over-year, or 5.1% quarter-over-quarter.

Continued loan growth should support future growth for BBD.

Source: Investor Presentation

Additionally, its client base in its AGORA digital investment brokerage app grew by nearly 36% to 743K, with $12.54 billion of invested funds.

Banco Bradesco possesses competitive advantages that should fuel its expected growth, primarily its size and industry position. The company’s Basel ratio currently stands at 15.8% (the minimum capital ratio banks must maintain to ensure solvency is 8%), which makes for a healthy capital structure.

Liquidity coverage stands at 138%, also ample to ensure available funds if needed. However, with the economic struggles facing Brazil and the currency risk posed by the strong U.S. dollar, we expect flat EPS over the next five years for BBD.

Fortunately, despite the lack of earnings growth we view the company’s high dividend payout as secure, given the comfortable dividend payout ratio of ~48%.

Dividend Analysis

We are expecting FY2022 dividends of $0.20 per share, reflecting the company’s historical dividend policy. With a current share price of ~$4.11, the stock has a 4.9% dividend yield. BBD is an attractive high dividend stock, particularly as the S&P 500 Index yields just 1.3% on average right now.

And, BBD stock is even more appealing with its monthly dividend. Dividend payments are made on a monthly basis, which is quite rare for an international company. The company usually pays around $0.0036 per share each month, accompanied by two special dividends per year.

It is worth noting that the company had consecutively grown its dividend annually from 2012 to 2019, but again, FX changes have distorted that amount.

When it comes to dividend safety, we expect the company to report full-year EPS of $0.42. This means the company has a projected dividend payout ratio of ~48% for 2021, a healthy payout ratio that indicates the dividend is sustainable, barring a deep and severe economic downturn in Brazil.

While Banco Bradesco’s dividend is not consistent and will continue to vary based on the company’s underlying results and FX changes, the base level ($0.0036/month) should be considered quite safe, being well-covered by the company’s cash from operations. The company continued to pay its base monthly rate even under the Great Financial Crisis, despite its financials suffering along with the rest of its sector.

Final Thoughts

Banco Bradesco struggled due to the coronavirus pandemic, but the company recovered a bit in 2021. Banco Bradesco is also a well-managed financial services company.

For American investors, the company’s underlying growth has been wiped out by the non-stop depreciation of BRL/USD. Currency risk is an important factor when it comes to international stocks, and BBD is a prime example.

Shares currently yield almost 5% and make monthly dividend payments, both of which make the stock appealing for income investors. And with a payout ratio below 50%, the dividend payout appears secure. At the same time, the company poses various risks including foreign exchange and economic conditions in Brazil.

Therefore, only risk-tolerant income investors should consider a position in BBD stock.

If you are interested in finding more high-quality dividend growth stocks suitable for long-term investment, the following Sure Dividend databases will be useful:

The major domestic stock market indices are another solid resource for finding investment ideas. Sure Dividend compiles the following stock market databases and updates them monthly:

Thanks for reading this article. Please send any feedback, corrections, or questions to

More from sure dividend
The Sure Dividend Investing MethodMember's Area