Delving into the Dividend Details of Tate & Lyle PLC (TATYF, Financial)
Tate & Lyle PLC (TATYF) recently announced a dividend of $0.06 per share, payable on 2024-01-05, with the ex-dividend date set for 2023-11-24. 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 Tate & Lyle PLC's dividend performance and assess its sustainability.
What Does Tate & Lyle PLC Do?
Tate & Lyle is a global provider of food and beverage ingredients and solutions. Following the sale in 2022 of a controlling stake in its commodity ingredients business, as well as its exit from the sugar business a decade earlier, Tate & Lyle is now focused on specialty ingredients—sweeteners, starches, and soluble fiber. It has 2,700 employees and operates in over 140 countries, with most of its revenue generated in North America.
A Glimpse at Tate & Lyle PLC's Dividend History
Tate & Lyle PLC has maintained a consistent dividend payment record since 2008. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Tate & Lyle PLC's Dividend Yield and Growth
As of today, Tate & Lyle PLC currently has a 12-month trailing dividend yield of 3.08% and a 12-month forward dividend yield of 3.24%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Tate & Lyle PLC's annual dividend growth rate was -19.20%. Extended to a five-year horizon, this rate increased to -7.50% per year. And over the past decade, Tate & Lyle PLC's annual dividends per share growth rate stands at -1.30%.
Based on Tate & Lyle PLC's dividend yield and five-year growth rate, the 5-year yield on cost of Tate & Lyle PLC stock as of today is approximately 2.09%.
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, Tate & Lyle PLC's dividend payout ratio is 0.43.
Tate & Lyle PLC's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Tate & Lyle PLC's profitability 7 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Tate & Lyle 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 Tate & Lyle PLC's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Tate & Lyle PLC's revenue has increased by approximately -15.90% per year on average, a rate that underperforms than approximately 91% 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, Tate & Lyle PLC's earnings increased by approximately -10.10% per year on average, a rate that underperforms than approximately 70.39% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -2.80%, which underperforms than approximately 69.64% of global competitors.
Next Steps
In conclusion, while Tate & Lyle PLC's dividend payments remain consistent, the dividend growth rate, payout ratio, profitability, and growth metrics offer a mixed picture. The company's solid profitability and reasonable payout ratio suggest that dividends are sustainable in the near term. However, investors should be cautious of the negative growth rates in revenue, earnings, and EBITDA, which may challenge the long-term sustainability of dividend increases. Value investors may want to consider these factors carefully alongside the company's strategic focus on specialty ingredients and its competitive position in the food and beverage industry. Will Tate & Lyle PLC's dividends continue to sweeten the deal for investors? Only time will tell.
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.
