Understanding the Dividend Dynamics of Capital One Financial Corp
Capital One Financial Corp(COF, Financial) recently announced a dividend of $0.6 per share, payable on 2024-02-23, with the ex-dividend date set for 2024-02-09. 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 Capital One Financial Corps dividend performance and assess its sustainability.
What Does Capital One Financial Corp Do?
Capital One is a diversified financial services holding company headquartered in McLean, Virginia. Originally a spinoff of Signet Financial's credit card division in 1994, the company is now primarily involved in credit card lending, auto loans, and commercial lending.
A Glimpse at Capital One Financial Corp's Dividend History
Capital One Financial Corp has maintained a consistent dividend payment record since 1995. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Capital One Financial Corp's Dividend Yield and Growth
As of today, Capital One Financial Corp currently has a 12-month trailing dividend yield of 1.79% and a 12-month forward dividend yield of 1.79%. This suggests an expectation of same dividend payments over the next 12 months.
Over the past three years, Capital One Financial Corp's annual dividend growth rate was 14.50%. Extended to a five-year horizon, this rate decreased to 6.60% per year. And over the past decade, Capital One Financial Corp's annual dividends per share growth rate stands at an impressive 14.60%.
Based on Capital One Financial Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Capital One Financial Corp stock as of today is approximately 2.46%.
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 2023-12-31, Capital One Financial Corp's dividend payout ratio is 0.19.
Capital One Financial Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Capital One Financial Corp's profitability 7 out of 10 as of 2023-12-31, 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. Capital One Financial Corp'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 Capital One Financial Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Capital One Financial Corp's revenue has increased by approximately 12.70% per year on average, a rate that outperforms approximately 68.31% 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, Capital One Financial Corp's earnings increased by approximately 17.90% per year on average, a rate that outperforms approximately 65.33% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 32.30%, which outperforms approximately 85.42% of global competitors.
Next Steps
In conclusion, Capital One Financial Corp's consistent dividend payments, robust dividend growth rate, and prudent payout ratio underscore its commitment to shareholder returns. Coupled with the company's solid profitability and favorable growth metrics, these factors paint a promising picture for current and potential investors. As the financial industry evolves, Capital One Financial Corp appears well-positioned to continue its dividend legacy while adapting to market changes. Investors looking to diversify their portfolio with a stock that offers a blend of stability and growth potential may find Capital One Financial Corp an attractive option. Will the company's strategic initiatives and market position allow it to sustain and possibly enhance its dividend offerings in the future? That remains a key question for value investors.
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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.
