An Insightful Analysis of the Company's Dividend History, Yield, Growth Rates, and Future Prospects
George Weston Ltd (WNGRF, Financial) recently announced a dividend of $0.71 per share, payable on 2023-10-01, 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 George Weston Ltd's dividend performance and assess its sustainability.
What Does George Weston Ltd Do?
George Weston is a holding company that operates through two subsidiaries encompassing retail and real estate. The first is Loblaw, Canada's largest grocer, in which George Weston has a 53% controlling stake. Key banners include Loblaws, No Frills, Maxi, and Shoppers Drug Mart. The second is Choice Properties, an open-ended real estate investment trust, where George Weston's ownership sits close to 62%. The company sold the previously wholly owned Weston Foods, a North American bakery, in early 2022. While the two remaining entities are separate, they operate under a contractual, as well as tacit, framework of strategic business partnerships. This is exemplified by Loblaw being Choice's largest tenant.
A Glimpse at George Weston Ltd's Dividend History
George Weston Ltd has maintained a consistent dividend payment record since 2003. Dividends are currently distributed on a quarterly basis. George Weston Ltd has increased its dividend each year since 2009. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 14 years.
Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down George Weston Ltd's Dividend Yield and Growth
As of today, George Weston Ltd currently has a 12-month trailing dividend yield of 1.79% and a 12-month forward dividend yield of 1.85%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, George Weston Ltd's annual dividend growth rate was 7.30%. Extended to a five-year horizon, this rate decreased to 6.80% per year. And over the past decade, George Weston Ltd's annual dividends per share growth rate stands at 5.10%.
Based on George Weston Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of George Weston Ltd stock as of today is approximately 2.49%.
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, George Weston Ltd's dividend payout ratio is 0.23.
George Weston Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks George Weston Ltd's profitability 7 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. George Weston 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 George Weston Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. George Weston Ltd's revenue has increased by approximately 6.50% per year on average, a rate that outperforms than approximately 57.24% 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, George Weston Ltd's earnings increased by approximately 113.10% per year on average, a rate that outperforms than approximately 94.98% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 18.40%, which outperforms than approximately 69.28% of global competitors.
Conclusion: A Promising Dividend Stock?
Considering George Weston Ltd's consistent dividend payments, impressive dividend growth rate, sustainable payout ratio, robust profitability, and strong growth metrics, it appears to be a promising dividend stock. However, investors should also consider other factors such as the company's competitive position, industry trends, and potential risks before making an investment decision. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
