Exploring the Dividend Performance and Future Prospects of Ituran Location and Control Ltd (ITRN, Financial)
Ituran Location and Control Ltd (ITRN) recently announced a dividend of $0.15 per share, payable on 2023-10-11, with the ex-dividend date set for 2023-09-26. 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 Ituran Location and Control Ltd's dividend performance and assess its sustainability.
Company Overview: Ituran Location and Control Ltd
Ituran Location and Control Ltd is a provider of location-based services. The company operates in two segments, namely Telematics services, and Telematics products. The Telematics services segment consists of regionally- based stolen vehicle recovery (SVR) services, fleet management services, and value-added services comprised of personal advanced locater services and concierge services. The Telematics product segment consists of short and medium-range two-way machine-to-machine wireless communications products that are used for various applications, including automatic vehicle location, and automatic vehicle identification. Its geographical segments include Israel, Brazil, and Others.
Dividend History of Ituran Location and Control Ltd
Ituran Location and Control Ltd has maintained a consistent dividend payment record since 2004. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Dividend Yield and Growth of Ituran Location and Control Ltd
As of today, Ituran Location and Control Ltd currently has a 12-month trailing dividend yield of 1.91% and a 12-month forward dividend yield of 1.94%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Ituran Location and Control Ltd's annual dividend growth rate was -16.20%. Extended to a five-year horizon, this rate increased to -13.30% per year. And over the past decade, Ituran Location and Control Ltd's annual dividends per share growth rate stands at -7.70%.
Based on Ituran Location and Control Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Ituran Location and Control Ltd stock as of today is approximately 0.94%.
Assessing 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, Ituran Location and Control Ltd's dividend payout ratio is 0.27.
Ituran Location and Control Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Ituran Location and Control Ltd's profitability 8 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.
Examining Growth Metrics for Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Ituran Location and Control Ltd's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Ituran Location and Control Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Ituran Location and Control Ltd's revenue has increased by approximately 2.60% per year on average, a rate that underperforms than approximately 55.77% 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, Ituran Location and Control Ltd's earnings increased by approximately 76.70% per year on average, a rate that underperforms than approximately 7.56% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -4.20%, which underperforms than approximately 79.92% of global competitors.
Conclusion
In conclusion, Ituran Location and Control Ltd's consistent dividend payments, combined with its profitability and growth metrics, indicate a potential for sustained dividends in the future. However, investors should monitor the company's payout ratio, dividend growth rate, and growth metrics to ensure the sustainability of these dividends. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
