Assessing the Upcoming Dividend and Historical Performance of Metro Inc (MTRAF, Financial)
Metro Inc (MTRAF) recently announced a dividend of $0.34 per share, payable on 2024-03-12, with the ex-dividend date set for 2024-02-14. 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 Metro Inc's dividend performance and assess its sustainability.
What Does Metro Inc Do?
Metro Inc is the third-largest grocery retailer in Canada (behind Loblaw and Sobeys) and also owns the top pharmacy chain in Quebec, Jean Coutu, following the 2018 acquisition. Its grocery banners include supermarket chain Metro, discounters Super C and Food Basics, and ethnic food grocer Adonis, while its pharmacies primarily operate under the Jean Coutu and Brunet trademarks. Metro operates both as a food retailer and a franchisor, licensing its trademarks and supplying merchandise to registered pharmacists. The firm also acts as a wholesaler and distributor to serve smaller, neighborhood grocery stores. Unlike peers Loblaw and Sobeys that operate chain stores across Canada, Metro's operations are concentrated in the provinces of Quebec and Ontario, with no presence in western Canada.
A Glimpse at Metro Inc's Dividend History
Metro Inc has maintained a consistent dividend payment record since 2010, with dividends currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Metro Inc's Dividend Yield and Growth
As of today, Metro Inc currently has a 12-month trailing dividend yield of 1.73% and a 12-month forward dividend yield of 1.95%. This suggests an expectation of increased dividend payments over the next 12 months. Metro Inc's dividend yield of 1.73% is near a 10-year high and outperforms 31.22% of global competitors in the Retail - Defensive industry, suggesting that the company's dividend yield stands out as an attractive proposition for income investors.
Over the past three years, Metro Inc's annual dividend growth rate was 10.60%. Extended to a five-year horizon, this rate decreased to 10.10% per year. And over the past decade, Metro Inc's annual dividends per share growth rate stands at an impressive 12.80%. Based on Metro Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Metro Inc stock as of today is approximately 2.80%.
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, Metro Inc's dividend payout ratio is 0.28.
Metro Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Metro Inc's profitability 8 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported positive net income for each 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. Metro Inc's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Revenue is the lifeblood of any company, and Metro Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Metro Inc's revenue has increased by approximately 7.70% per year on average, a rate that outperforms approximately 61.46% 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, Metro Inc's earnings increased by approximately 9.90% per year on average, a rate that outperforms approximately 44.72% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 10.70%, which outperforms approximately 50.29% of global competitors.
Next Steps
In conclusion, Metro Inc's upcoming dividend payment, consistent dividend growth rate, reasonable payout ratio, solid profitability, and positive growth metrics paint a picture of a company that is not only committed to returning value to shareholders but also capable of sustaining these returns over the long term. Investors considering Metro Inc for its dividend prospects may find reassurance in these indicators of financial health and strategic positioning within its industry. As the company continues to navigate the competitive retail landscape, could Metro Inc's strategic focus on the Quebec and Ontario markets be the key to its ongoing dividend reliability and growth?
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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.
