Deep Dive into Teck Resources Ltd's Dividend Performance
Teck Resources Ltd (TECK, Financial) recently announced a dividend of $0.13 per share, payable on 2023-09-29, with the ex-dividend date set for 2023-09-14. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's deep dive into Teck Resources Ltd's dividend performance and assess its sustainability.
What Does Teck Resources Ltd Do?
Teck Resources is a diversified miner with coal, copper, and zinc operations in Canada, the United States, Chile, and Peru. Metallurgical coal is Teck's primary commodity in terms of EBITDA contribution, followed by copper, zinc contributing a smaller amount to earnings. Teck ranks as the world's second-largest exporter of seaborne metallurgical coal and is a top-three zinc miner. It is building a major new copper mine in Chile at the majority-owned Quebrada Blanca 2, in partnership with Sumitomo, which will drive an increase in Teck's attributable copper production by roughly 80%. Along with a number of additional copper growth options, Teck's strategy is to rebalance its portfolio to low carbon metals such as copper. To that end, it sold its oil sands business in early 2023.
A Glimpse at Teck Resources Ltd's Dividend History
Teck Resources Ltd has maintained a consistent dividend payment record since 2010. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Teck Resources Ltd's Dividend Yield and Growth
As of today, Teck Resources Ltd currently has a 12-month trailing dividend yield of 1.73% and a 12-month forward dividend yield of 0.88%. This suggests an expectation of decrease dividend payments over the next 12 months.
Over the past three years, Teck Resources Ltd's annual dividend growth rate was 35.70%. Extended to a five-year horizon, this rate decreased to 14.00% per year. And over the past decade, Teck Resources Ltd's annual dividends per share growth rate stands at -10.70%.
Based on Teck Resources Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Teck Resources Ltd stock as of today is approximately 3.33%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-06-30, Teck Resources Ltd's dividend payout ratio is 0.19.
Teck Resources Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Teck Resources Ltd's profitability 7 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported net profit in 7 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Teck Resources Ltd's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Teck Resources Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Teck Resources Ltd's revenue has increased by approximately 14.90% per year on average, a rate that outperforms than approximately 58.14% of global competitors.
Teck Resources Ltd: A Sustainable Dividend Payer?
In conclusion, Teck Resources Ltd's consistent dividend payments, impressive growth rate, and reasonable payout ratio paint a picture of a company committed to rewarding its shareholders. The company's robust profitability and growth metrics further suggest that it is well-positioned to sustain its dividends in the foreseeable future. However, investors must continue to monitor these metrics for any signs of potential trouble. As always, it's crucial to conduct your own thorough research before making any investment decisions.
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