BAYZF - Bayer: Long-Term Upside After The Dividend Cut

2024-02-20 14:38:36 ET

Summary

• Bayer recently cut its dividend by more than 90%, resulting in a dividend yield of less than 1%.
• The company's valuation actually rose after the dividend cut, indicating investor approval.
• Bayer's risks include ongoing litigation related to glyphosate and a lack of major blockbusters in its pipeline, but it has potential upside in its healthcare and crop science segments.

Bayer ( OTCPK:BAYZF ) has been an investment that I've "played" with before, investing and selling and rotating. My latest article was several years ago, and I haven't been a heavy investor into Bayer for quite some time at this point. Looking at what Bayer did only a few days ago, this is a good thing.

Why?

Because Bayer recently cut its dividend to the bone, by which I mean that the cut was more than 90% (95% at announcement time ), and is now less than one percent as a result of this. It goes to show you that dividends alone are never enough, nor should it be a reason for investing in a company - at least not the sole reason. This is a mistake that many investors make....

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