Unveiling the Dividend Prowess of Africa's Largest Lender, Standard Bank Group Ltd
Standard Bank Group Ltd(SGBLY, Financial) recently announced a dividend of $0.36 per share, payable on 2023-09-28, 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 Standard Bank Group Ltd's dividend performance and assess its sustainability.
Understanding Standard Bank Group Ltd
Standard Bank Group Ltd provides banking and other financial services for its customers in roughly 20 countries in sub-Saharan Africa. Its two biggest business segments are personal and business banking and corporate and investment banking. The company earns most of its income from the personal and business banking segment, where it offers credit cards, mortgages, vehicle loans, insurance, and other lending and transactional products. The company generates nearly all its income in Africa, with most coming from South Africa.
Tracing Standard Bank Group Ltd's Dividend History
Standard Bank Group Ltd has maintained a consistent dividend payment record since 2009. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Decoding Standard Bank Group Ltd's Dividend Yield and Growth
As of today, Standard Bank Group Ltd currently has a 12-month trailing dividend yield of 6.51% and a 12-month forward dividend yield of 7.23%. This suggests an expectation of increase dividend payments over the next 12 months. Over the past three years, Standard Bank Group Ltd's annual dividend growth rate was 1.10%. Extended to a five-year horizon, this rate decreased to -2.70% per year. And over the past decade, Standard Bank Group Ltd's annual dividends per share growth rate stands at 5.20%. Based on Standard Bank Group Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Standard Bank Group Ltd stock as of today is approximately 5.68%.
Scrutinizing Dividend Sustainability: 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, Standard Bank Group Ltd's dividend payout ratio is 0.49. Standard Bank Group Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Standard Bank Group Ltd's profitability 6 out of 10 as of 2023-06-30, suggesting fair profitability. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Assessing Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Standard Bank Group Ltd's growth rank of 6 out of 10 suggests that the company has a fair growth outlook. Revenue is the lifeblood of any company, and Standard Bank Group Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Standard Bank Group Ltd's revenue has increased by approximately 4.30% per year on average, a rate that underperforms than approximately 62.88% of global competitors. The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Standard Bank Group Ltd's earnings increased by approximately 9.80% per year on average, a rate that underperforms than approximately 46.24% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 49.70%, which underperforms than approximately 3.03% of global competitors.
Concluding Remarks
Standard Bank Group Ltd's consistent dividend payment record, promising dividend yields, and robust growth metrics make it an enticing proposition for dividend investors. However, investors should also consider the company's payout ratio and profitability rank to assess the sustainability of these dividends. While the company's growth rank suggests a fair growth outlook, its revenue and EPS growth rates underperform a significant percentage of global competitors. Therefore, investors must strike a balance between the potential dividend income and the underlying growth prospects of the company. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
