Delving Into Wartsila Corp's Dividend Dynamics
Wartsila Corp (WRTBF, Financial) recently announced a dividend of $0.16 per share, payable on 2024-03-18, with the ex-dividend date set for 2024-03-08. 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 Wartsila Corp's dividend performance and assess its sustainability.
What Does Wartsila Corp Do?
Wartsila is a global manufacturer of critical equipment and services for the marine and energy markets with operations in over 70 countries. Approximately one half of the group's sales are derived from the sale of services and spare parts through its network of 258 sales and service network locations. Wartsila is listed on the Nasdaq Helsinki exchange in Finland. Approximately 1 in 3 oceangoing vessels has a Wartsila solution on board, translating into an installed base of over 50,000 vessels and 10,000 customers.
A Glimpse at Wartsila Corp's Dividend History
Wartsila Corp has maintained a consistent dividend payment record since 2011. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Wartsila Corp's Dividend Yield and Growth
As of today, Wartsila Corp currently has a 12-month trailing dividend yield of 1.83% and a 12-month forward dividend yield of 2.29%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Wartsila Corp's annual dividend growth rate was -18.50%. Extended to a five-year horizon, this rate decreased to -23.30% per year. And over the past decade, Wartsila Corp's annual dividends per share growth rate stands at -3.80%.
Based on Wartsila Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Wartsila Corp stock as of today is approximately 0.49%.
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, Wartsila Corp's dividend payout ratio is 0.57.
Wartsila Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Wartsila Corp's profitability 7 out of 10 as of 2023-12-31, 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. Wartsila 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 Wartsila Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Wartsila Corp's revenue has increased by approximately 9.40% per year on average, a rate that outperforms approximately 56.82% 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, Wartsila Corp's earnings increased by approximately 28.20% per year on average, a rate that outperforms approximately 71.06% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -12.50%, which outperforms approximately 12.36% of global competitors.
Next Steps
In conclusion, while Wartsila Corp's dividend history reflects a commitment to returning value to shareholders, the negative dividend growth rates over various periods may raise concerns about the long-term growth of its dividends. However, the company's solid profitability rank and positive growth metrics provide a counterbalance, suggesting that Wartsila Corp may have the capacity to sustain or even improve its dividend payments in the future. Investors should weigh the payout ratio, profitability, and growth metrics against the backdrop of industry trends and company strategy when considering Wartsila Corp as a potential addition to a dividend-focused portfolio.
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.
