Julius Baer Gruppe an Attractive Dividend Play

Wide-moat Julius Baer Gruppe reported net profit of CHF 491 million for the first half of its 2020 fiscal year, a 43% year-on-year increase; which is in line with the consensus estimate for the quarter collected by Visible Alpha. Julius Baer exceeded all its 2022 targets in these results already. We believe the second half of the year will see softer results as the very strong brokerage revenue results, as well as strong trading revenue growth, are likely to be more muted. Investors looking for safe dividend prospects should look no further than Julius Baer. We believe Julius Baer will declare a CHF 1.50 dividend for 2020 when it releases its full-year results in the first quarter of 2021. At Julius Baer's current share price that translates into a dividend yield just shy of 4%. We remind investors that Julius Baer is also trading cum dividend of CHF 0.75: this is the second half of the 2019 dividend that Julius Baer will pay out in November 2020. We view Julius Baer's earnings visibility as high due to its limited exposure to credit risk. We increase our fair value estimate to CHF 55, from CHF 51 previously.