Assessing the Viability of Upbound Group Inc's Upcoming Dividend
Upbound Group Inc (UPBD, Financial) recently announced a dividend of $0.37 per share, payable on 2024-01-09, with the ex-dividend date set for 2023-12-18. 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 Upbound Group Inc's dividend performance and assess its sustainability.
What Does Upbound Group Inc Do?
Upbound Group Inc is an omnichannel platform company committed to elevating financial opportunity for all through inclusive, and technology-driven financial solutions that address the evolving needs and aspirations of consumers. It has four operating segments; The Rent-A-Center Business segment operates lease-to-own stores, the Acima segment offers lease-to-own transactions to consumers who do not qualify for financing from the traditional retailer, and also offers lease-to-own transactions through virtual offering solutions across e-commerce, digital, and mobile channels, Mexico segment offers lease-to-own stores in Mexico. The franchising segment offers the sale of rental merchandise to its franchisees. The company derives a majority of its revenue from the Acima segment.
A Glimpse at Upbound Group Inc's Dividend History
Upbound Group Inc 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 Upbound Group Inc's Dividend Yield and Growth
As of today, Upbound Group Inc currently has a 12-month trailing dividend yield of 4.10% and a 12-month forward dividend yield of 4.46%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Upbound Group Inc's annual dividend growth rate was 36.10%. Based on Upbound Group Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Upbound Group Inc stock as of today is approximately 4.10%.
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, Upbound Group Inc's dividend payout ratio is 8.50, which may suggest that the company's dividend is sustainable. Upbound Group Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Upbound Group Inc's profitability 7 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported net profit in 8 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Upbound Group Inc'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 Upbound Group Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Upbound Group Inc's revenue has increased by approximately 14.70% per year on average, a rate that outperforms approximately 64.32% 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, Upbound Group Inc's earnings increased by approximately -59.20% per year on average, a rate that outperforms approximately 8.12% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 35.30%, which outperforms approximately 84.89% of global competitors.
Next Steps
In conclusion, Upbound Group Inc's upcoming dividend, alongside its historical dividend growth and favorable payout ratio, signals a commitment to returning value to shareholders. The company's strong profitability and growth metrics further reinforce the potential for sustained dividend payouts. Investors considering Upbound Group Inc for its dividend prospects should also take into account the company's overall financial health and market position. With a strategic focus on omnichannel financial solutions and a robust operational structure, Upbound Group Inc appears poised to maintain its dividend payments, making it an interesting option for value investors seeking dividend income. For those looking to explore further, 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.
