Unveiling the Dividend Performance and Sustainability of Kingfisher PLC
Kingfisher PLC (KGFHY, Financial) recently announced a dividend of $0.09 per share, payable on 2023-11-22, with the ex-dividend date set for 2023-10-12. 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 delve into Kingfisher PLC's dividend performance and assess its sustainability.
What Does Kingfisher PLC Do?
Kingfisher is a home improvement company with over 1,570 stores in eight countries across Europe. The company operates several retail banners that are focused on trade customers and general do-it-yourself needs. Kingfisher's main retail brands include B&Q, Screwfix, and TradePoint in the United Kingdom and Castorama and Brico Depot in France. The U.K. and France are Kingfisher's largest markets, accounting for 81% of sales. The company is the second-largest DIY retailer in Europe, with a leading position in the U.K. and a number-two position in France.
A Glimpse at Kingfisher PLC's Dividend History
Kingfisher PLC has maintained a consistent dividend payment record since 2021. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Kingfisher PLC's Dividend Yield and Growth
As of today, Kingfisher PLC currently has a 12-month trailing dividend yield of 5.80% and a 12-month forward dividend yield of 5.89%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Kingfisher PLC's annual dividend growth rate was 4.70%. Based on Kingfisher PLC's dividend yield and five-year growth rate, the 5-year yield on cost of Kingfisher PLC stock as of today is approximately 5.80%.
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, Kingfisher PLC's dividend payout ratio is 0.74. This may suggest that the company's dividend may not be sustainable.
Kingfisher PLC's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Kingfisher PLC's profitability 7 out of 10 as of 2023-07-31, 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. Kingfisher PLC'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 Kingfisher PLC's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Kingfisher PLC's revenue has increased by approximately 6.20% per year on average, a rate that outperforms approximately 57.31% 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, Kingfisher PLC's earnings increased by approximately 288.70% per year on average, a rate that outperforms approximately 99.27% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 29.50%, outperforms approximately 84.97% of global competitors.
Next Steps
Based on the analysis of Kingfisher PLC's dividend payments, dividend growth rate, payout ratio, profitability, and growth metrics, it is evident that the company has a strong track record of maintaining consistent dividend payments. However, the sustainability of the dividends hinges on its future growth and profitability. Investors should keep an eye on Kingfisher PLC's growth metrics and profitability rank for further insights into the company's dividend sustainability. 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.
