Assessing the Sustainability and Growth of Acerinox SA's Dividends
Acerinox SA (ANIOY, Financial) recently announced a dividend of $0.17 per share, payable on 2024-02-12, with the ex-dividend date set for 2024-01-24. 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 Acerinox SA's dividend performance and assess its sustainability.
What Does Acerinox SA Do?
Acerinox SA is a Spain-based stainless steel maker engaged in the manufacture, processing, and marketing of stainless steel products and special alloys. The company operates in two segments; the Stainless steel segment which accounts for the majority of the company's revenue, includes both flat and long stainless steel products, and the High-performance alloys segment includes special alloys with high nickel content. This segment includes all the companies in the VDM Metals subgroup. Geographically the company operates in Spain, the Rest of Europe, America, Africa, Asia, and Others.
A Glimpse at Acerinox SA's Dividend History
Acerinox SA has maintained a consistent dividend payment record since 2017. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Acerinox SA's Dividend Yield and Growth
As of today, Acerinox SA currently has a 12-month trailing dividend yield of 6.06% and a 12-month forward dividend yield of 6.22%. This suggests an expectation of increased dividend payments over the next 12 months. Extended to a five-year horizon, this rate increased to 3.40% per year. And over the past decade, Acerinox SA's annual dividends per share growth rate stands at 4.30%.
Based on Acerinox SA's dividend yield and five-year growth rate, the 5-year yield on cost of Acerinox SA stock as of today is approximately 7.16%.
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, Acerinox SA's dividend payout ratio is 0.86, which may suggest that the company's dividend may not be sustainable.
Acerinox SA's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Acerinox SA's profitability 7 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported net profit in 9 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. Acerinox SA'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 Acerinox SA's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Acerinox SA's revenue has increased by approximately 24.70% per year on average, a rate that outperforms approximately 82.11% 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, Acerinox SA's earnings increased by approximately 127.50% per year on average, a rate that outperforms approximately 89.95% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 26.70%, which outperforms approximately 70.81% of global competitors, underlines its strong growth potential.
Engaging Conclusion: Dividend Prospects in a Growing Company
In conclusion, Acerinox SA's upcoming dividend payment, combined with its history of consistent dividends, presents an attractive opportunity for income-seeking investors. While the dividend payout ratio raises some concerns about sustainability, the company's strong profitability and impressive growth metrics offer reassurance. With robust revenue, earnings, and EBITDA growth rates, Acerinox SA appears well-positioned to continue rewarding shareholders. Will Acerinox SA's dividends continue to shine amidst the challenging global economic landscape? Only time will tell, but the signs are promising for this stainless steel titan.
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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.
