Understanding the Dividend Dynamics of Calavo Growers Inc
Calavo Growers Inc (CVGW, Financial) recently announced a dividend of $0.1 per share, payable on 2024-01-31, with the ex-dividend date set for 2024-01-25. 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 Calavo Growers Inc's dividend performance and assess its sustainability.
What Does Calavo Growers Inc Do?
Calavo Growers Inc is in the avocado industry and an expanding provider of value-added fresh food. It sells avocados to a group of supermarket chains, wholesalers, food service and other distributors, under brand labels, as well as private labels. The company procures avocados from California, Mexico and other growing regions around the world. Calavo is segmented into three segments namely, Fresh products; Calavo Foods; and RFG. The company derives its revenue from its Fresh products segment.
A Glimpse at Calavo Growers Inc's Dividend History
Calavo Growers Inc has maintained a consistent dividend payment record since 2002. Dividends are currently distributed on a quarterly basis.
Calavo Growers Inc has increased its dividend each year since 2003. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 21 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Calavo Growers Inc's Dividend Yield and Growth
As of today, Calavo Growers Inc currently has a 12-month trailing dividend yield of 1.10% and a 12-month forward dividend yield of 1.46%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Calavo Growers Inc's annual dividend growth rate was 4.80%. Extended to a five-year horizon, this rate increased to 5.60% per year. And over the past decade, Calavo Growers Inc's annual dividends per share growth rate stands at 7.60%.
Based on Calavo Growers Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Calavo Growers Inc stock as of today is approximately 1.44%.
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 2023-07-31, Calavo Growers Inc's dividend payout ratio is 0.00.
Calavo Growers Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Calavo Growers Inc's profitability 6 out of 10 as of 2023-07-31, suggesting fair profitability. The company has reported net profit in 6 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Calavo Growers Inc's growth rank of 6 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and Calavo Growers Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Calavo Growers Inc's revenue has increased by approximately -0.30% per year on average, a rate that underperforms than approximately 72.18% 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, Calavo Growers Inc's earnings increased by approximately -45.10% per year on average, a rate that underperforms than approximately 96.73% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -32.50%, which underperforms than approximately 97.69% of global competitors.
Next Steps
In conclusion, while Calavo Growers Inc has a history of consistent dividend payments and has shown a capacity for dividend growth, its recent financial performance raises questions about the sustainability of its dividend growth over the long term. The company's payout ratio is currently non-problematic, but its profitability and growth metrics indicate challenges that could impact future dividends. Investors should closely monitor Calavo Growers Inc's ability to improve its revenue and earnings growth to ensure that its dividend remains a reliable component of their investment income. For those looking to expand their portfolio with dividend-paying stocks, 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.
