The TAKKT Dividend Trap: Why Chasing Yield Could Backfire

TAKKT AG (ETR:TTK), a German industrial firm specializing in office and household appliances, currently sports a dividend yield of 8.1%—a figure that has attracted income-seeking investors. But beneath this headline-grabbing payout lies a precarious reality: a dividend history riddled with inconsistency, unsustainable payout ratios, and the looming threat of a post-ex-dividend price collapse. For those considering a "dividend capture" trade ahead of the May 22, 2025, ex-date, the risks far outweigh the rewards. Here’s why.

The Allure—and Illusion—of TAKKT’s High Yield

At first glance, TAKKT’s 8.1% yield (as of May 2025) seems like a golden opportunity. However, this yield masks critical flaws. The company’s dividend payout has been anything but stable. Over the past decade, TAKKT has relied on special bonuses layered atop its base dividend to maintain its payout, a strategy that has failed to align with its volatile earnings.

As shown in the dividend history, TAKKT’s base dividend has remained stubbornly flat at €0.60 per share since 2023, while special bonuses have been erratic. In 2022, the company paid a €0.50 special dividend, but by 2024, this had dropped to €0.40. Worse still, its dividend cover ratio—the buffer between earnings and payouts—has collapsed. In 2023, the EPS was €0.33, yet the total dividend per share (including specials) was €1.00, resulting in a 0.33x cover ratio. By 2024, the EPS turned negative (-€0.63), making the payout ratio a staggering -86%, signaling unsustainable reliance on reserves or debt.

The Ex-Dividend Date: A Price Drop Waiting to Happen

Investors hoping to "capture" the dividend by buying shares before the May 22 ex-date face a brutal reality: the stock price typically drops by the dividend amount on the ex-date. For TAKKT, this means shareholders who buy solely to collect the €0.60 dividend risk seeing the stock price fall by €0.60 or more on May 23, 2025—the first trading day after the ex-date.

Historically, this dynamic has erased gains for dividend chasers. For example, in 2023, the stock fell by nearly 10% on the ex-dividend date, swamping the €0.60 dividend gain. With TAKKT’s share price already down 42% year-on-year in 2024 due to operational struggles, there’s little reason to believe this pattern won’t repeat.

Why the Dividend Isn’t Sustainable—and What It Means for Investors

TAKKT’s dividend is propped up by a CADI (Consistency of Dividend Increases) score of 0, reflecting no pattern of growth or stability. The company’s recent struggles—driven by U.S. tariffs, supply chain bottlenecks, and weak demand—have slashed earnings. Even its 2025 earnings forecast of €0.78 per share (a sharp rebound from 2024’s loss) is questionable, given its track record of missing targets.

A dividend cover ratio of just 1.30x in 2025 (if achieved) would still leave TAKKT’s payout hanging by a thread. By comparison, a healthy ratio is 2.0x or higher. This thin margin of safety, combined with a -34% three-year total shareholder return, suggests TAKKT is prioritizing dividends over rebuilding its business.

The Bottom Line: Avoid the Trap

Buying TAKKT before May 22 offers no net benefit. The dividend capture strategy is a losing bet due to:
1. Post-ex dividend price collapse: The stock will drop by at least the dividend amount, wiping out gains.
2. Unsustainable payout: With earnings volatility and a CADI=0, the dividend is a ticking time bomb.
3. Structural risks: TAKKT’s reliance on high-tariff markets and weak demand in key divisions (e.g., U.S. office furniture) undermines long-term viability.

Investors chasing yield here are playing with fire. The 8.1% dividend is not a reward—it’s a warning.

Action to Take: Steer clear of TAKKT AG ahead of the ex-dividend date. Focus instead on companies with consistent dividends, strong earnings momentum, and no dependency on special payouts to survive. The risks here are too great, and the rewards are an illusion.