Insights into Intesa Sanpaolo's Upcoming Dividend Payout and Financial Health
Intesa Sanpaolo (ISNPY, Financial) recently announced a dividend of $0.92 per share, payable on an unconfirmed future date, with the ex-dividend date set for 2023-11-20. 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 Intesa Sanpaolo's dividend performance and assess its sustainability.
What Does Intesa Sanpaolo Do?
Intesa Sanpaolo is an Italian banking group resulting from the merger of Banca Intesa and Sanpaolo IMI in 2007. Italy still accounts for by far the most of its earnings. Still, Intesa also has a growing international presence, focusing on some smaller countries in Central and Eastern Europe. Intesa has an enviable market position in the Italian savings market that it services through its private banking, asset management and life insurance operations, which accounts for around 25% of its revenue. While Intesa does have a sizable corporate banking business, it has limited exposure to securities trading and underwriting.
A Glimpse at Intesa Sanpaolo's Dividend History
Intesa Sanpaolo 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 Intesa Sanpaolo's Dividend Yield and Growth
As of today, Intesa Sanpaolo currently has a 12-month trailing dividend yield of 5.93% and a 12-month forward dividend yield of 8.54%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Intesa Sanpaolo's annual dividend growth rate was -8.10%. Based on Intesa Sanpaolo's dividend yield and five-year growth rate, the 5-year yield on cost of Intesa Sanpaolo stock as of today is approximately 5.93%.
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, Intesa Sanpaolo's dividend payout ratio is 0.43.
Intesa Sanpaolo's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Intesa Sanpaolo's profitability 4 out of 10 as of 2023-09-30, suggesting the dividend may not be sustainable. 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. Intesa Sanpaolo's growth rank of 4 out of 10 suggests that the company has poor growth prospects and thus, the dividend may not be sustainable. Revenue is the lifeblood of any company, and Intesa Sanpaolo's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Intesa Sanpaolo's revenue has increased by approximately 2.80% per year on average, a rate that underperforms approximately 71.44% 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, Intesa Sanpaolo's earnings increased by approximately -1.10% per year on average, a rate that underperforms approximately 78.76% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -9.70%, which underperforms approximately 93.18% of global competitors.
Next Steps
Considering Intesa Sanpaolo's dividend payments history, dividend growth rate, payout ratio, profitability, and growth metrics, investors should perform a thorough analysis before making any investment decisions. While the dividend yield is attractive, the negative growth rates and underperformance compared to industry peers raise questions about the long-term sustainability of these dividends. Value investors should weigh these factors and monitor the company's future earnings reports and strategic plans to assess the likelihood of continued dividend payments. 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.
