A Comprehensive Look at Empire Co Ltd's Dividend Performance and Sustainability
Empire Co Ltd (EMLAF, Financial) recently announced a dividend of $0.18 per share, payable on 2023-10-31, with the ex-dividend date set for 2023-10-12. As investors anticipate this forthcoming payment, attention also turns to the company's dividend history, yield, and growth rates. Using GuruFocus data, we delve into Empire Co Ltd's dividend performance and evaluate its sustainability.
What Does Empire Co Ltd Do?
Empire Co Ltd's primary operations encompass food retailing, investments, and other ventures. The food retailing division, which represents the majority of the company's income, operates through Empire's subsidiary Sobeys. This segment owns, affiliates, or franchises over 1,500 stores in 10 provinces, under retail banners including Sobeys, Safeway, IGA, Foodland, FreshCo, Thrifty Foods, Lawton's Drug Stores, and several retail fuel locations. The company's investment and other operations segment includes investments in Crombie REIT, an open-ended Canadian real estate investment trust, and the Genstar Development Partnership.
A Glimpse at Empire Co Ltd's Dividend History
Empire Co Ltd has maintained a consistent dividend payment record since 2004. Dividends are currently distributed on a quarterly basis. Empire Co Ltd has increased its dividend each year since 2004. The stock is thus listed as a dividend achiever, an honor given to companies that have increased their dividend each year for at least the past 19 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Empire Co Ltd's Dividend Yield and Growth
As of today, Empire Co Ltd currently has a 12-month trailing dividend yield of 1.79% and a 12-month forward dividend yield of 1.92%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Empire Co Ltd's annual dividend growth rate was 11.20%. Extended to a five-year horizon, this rate decreased to 9.80% per year. Over the past decade, Empire Co Ltd's annual dividends per share growth rate stands at 6.90%. Based on Empire Co Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Empire Co Ltd stock as of today is approximately 2.86%.
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 2023-07-31, Empire Co Ltd's dividend payout ratio is 0.23.
Empire Co Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Empire Co Ltd's profitability 7 out of 10 as of 2023-07-31, suggesting good profitability prospects. The company has reported net profit in 9 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Empire Co 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 Empire Co Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Empire Co Ltd's revenue has increased by approximately 6.20% per year on average, a rate that outperforms approximately 54.86% 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, Empire Co Ltd's earnings increased by approximately 7.10% per year on average, a rate that outperforms approximately 35.86% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 32.00%, which outperforms approximately 86.14% of global competitors.
Next Steps
In conclusion, Empire Co Ltd exhibits a strong dividend performance with a consistent growth rate. Its low payout ratio and high profitability rank suggest that the company is well-positioned to sustain its dividends. Moreover, its robust growth metrics indicate a promising future that could further enhance its dividend performance. With these factors in mind, Empire Co Ltd appears to be a viable option for investors seeking steady dividend income. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
