Understanding the Dividend Dynamics of BW LPG Ltd
BW LPG Ltd (BWLLF, Financial) recently announced a dividend of $0.8 per share, payable on 2023-12-15, with the ex-dividend date set for 2023-11-17. 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 look into BW LPG Ltd's dividend performance and assess its sustainability.
What Does BW LPG Ltd Do?
BW LPG Ltd is a transportation and logistics company that ships liquified petroleum gas through its fleet of maritime vessels. Liquified petroleum gas is used in homes, agriculture, transportation, and chemical production. The company is organized into two main segments: The shipping segment and the product services segment which buy and sell liquid petroleum gas and deliver it to customers.
A Glimpse at BW LPG Ltd's Dividend History
BW LPG Ltd has maintained a consistent dividend payment record since 2019. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down BW LPG Ltd's Dividend Yield and Growth
As of today, BW LPG Ltd currently has a 12-month trailing dividend yield of 16.64% and a 12-month forward dividend yield of 20.26%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, BW LPG Ltd's annual dividend growth rate was 34.00%. Based on BW LPG Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of BW LPG Ltd stock as of today is approximately 16.64%.
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 2023-09-30, BW LPG Ltd's dividend payout ratio is 0.82, which may suggest that the company's dividend may not be sustainable. BW LPG Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks BW LPG Ltd's profitability 8 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported net profit in 8 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. BW LPG 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 BW LPG Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. BW LPG Ltd's revenue has increased by approximately 29.00% per year on average, a rate that outperforms approximately 87.58% 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, BW LPG Ltd's earnings increased by approximately 1.90% per year on average, a rate that outperforms approximately 36.3% of global competitors.
Next Steps for Investors
Considering BW LPG Ltd's consistent dividend payments, robust dividend growth rate, and the current payout ratio, investors should closely monitor the company's profitability and growth metrics to make informed decisions. While the high dividend yield is attractive, the sustainability of these payments hinges on continued financial health and earnings performance. BW LPG Ltd's strong growth and profitability ranks indicate potential for ongoing dividend payments, but the payout ratio warrants caution and suggests a need for further analysis. Investors may benefit from using tools like the GuruFocus High Dividend Yield Screener to compare BW LPG Ltd with other high-dividend-yielding stocks and to ensure a diversified investment strategy.
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.
