Understanding the Dividend Dynamics of Text SA (LCHTF, Financial)
Text SA (LCHTF) recently announced a dividend of $1.63 per share, payable on 2024-01-15, with the ex-dividend date set for 2024-01-05. 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 Text SA's dividend performance and assess its sustainability.
What Does Text SA Do?
Text SA is a Poland-based company offering services in the SaaS (Software as a Service) model supporting sales and customer service. The company provides better customer service at scale by analyzing, enriching, and automating text communication. It has developed LiveChat, a tool used for direct communication between the website visitor and its owner. For the end user, it has the form of a chat window placed on the website, ChatBot, an all-in-one platform to build and launch conversational chatbots without coding; HelpDesk that supports customers with tickets; KnowledgeBase and OpenWidget.
A Glimpse at Text SA's Dividend History
Text SA has maintained a consistent dividend payment record since 2018. Dividends are currently distributed on a yearly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Text SA's Dividend Yield and Growth
As of today, Text SA currently has a 12-month trailing dividend yield of 3.74% and a 12-month forward dividend yield of 5.14%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Text SA's annual dividend growth rate was 32.90%. Extended to a five-year horizon, this rate decreased to 23.00% per year. Based on Text SA's dividend yield and five-year growth rate, the 5-year yield on cost of Text SA stock as of today is approximately 10.53%.
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, Text SA's dividend payout ratio is 0.79, which may suggest that the company's dividend may not be sustainable.
Text SA's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Text SA's profitability 9 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported positive net income for each of 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. Text SA's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Text SA's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Text SA's revenue has increased by approximately 34.10% per year on average, a rate that outperforms approximately 86.91% 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, Text SA's earnings increased by approximately 31.30% per year on average, a rate that outperforms approximately 76.82% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 28.70%, which outperforms approximately 79.33% of global competitors.
Next Steps
In light of Text SA's consistent dividend payments, robust dividend growth rate, and considerable payout ratio, investors should weigh these factors alongside the company's strong profitability and growth metrics. While the payout ratio may raise questions about dividend sustainability, the company's profitability and growth trends provide a reassuring backdrop. As investors consider their next steps, they may find it beneficial to explore how Text SA fits into their long-term investment strategy, especially in relation to dividend income. For those seeking to expand their portfolio with similar investment opportunities, 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.
