Investigating the Dividend Sustainability and Growth of Freeport-McMoRan Inc
Freeport-McMoRan Inc (FCX, Financial) recently announced a dividend of $0.15 per share, payable on 2024-05-01, with the ex-dividend date set for 2024-04-12. 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 Freeport-McMoRan Inc's dividend performance and assess its sustainability.
What Does Freeport-McMoRan Inc Do?
Freeport-McMoRan Inc is an international mining company. It has organized its mining operations into four primary divisions: North America copper mines, South America mining, Indonesia mining, and Molybdenum mines. Its reportable segments include the Morenci, Cerro Verde, and Grasberg (Indonesia mining) copper mines, the Rod & Refining operations, and Atlantic Copper Smelting and Refining. It derives key revenue from the sale of copper.
A Glimpse at Freeport-McMoRan Inc's Dividend History
Freeport-McMoRan Inc has maintained a consistent dividend payment record since 2018. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Freeport-McMoRan Inc's Dividend Yield and Growth
As of today, Freeport-McMoRan Inc currently has a 12-month trailing dividend yield of 1.21% and a 12-month forward dividend yield of 1.21%. This suggests an expectation of the same dividend payments over the next 12 months.
Over the past three years, Freeport-McMoRan Inc's annual dividend growth rate was 128.90%. Extended to a five-year horizon, this rate decreased to 39.80% per year. Based on Freeport-McMoRan Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Freeport-McMoRan Inc stock as of today is approximately 6.46%.
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, Freeport-McMoRan Inc's dividend payout ratio is 0.41.
Freeport-McMoRan Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Freeport-McMoRan Inc's profitability 7 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported net profit in 6 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. Freeport-McMoRan Inc'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 Freeport-McMoRan Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Freeport-McMoRan Inc's revenue has increased by approximately 17.70% per year on average, a rate that outperforms approximately 65.6% 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, Freeport-McMoRan Inc's earnings increased by approximately 90.10% per year on average, a rate that outperforms approximately 97.92% of global competitors.
Concluding Thoughts on Freeport-McMoRan Inc's Dividend Outlook
In conclusion, Freeport-McMoRan Inc's recent dividend announcement, coupled with its history of consistent payments and robust growth rates, paints a promising picture for dividend-seeking investors. The company's manageable payout ratio and solid profitability rank point to a sustainable dividend policy. Moreover, the impressive growth metrics further bolster confidence in the company's ability to maintain and potentially increase its dividend payouts in the future. Investors contemplating Freeport-McMoRan Inc as part of their income-generating portfolio should consider these factors for a comprehensive assessment. Will Freeport-McMoRan Inc continue to reward shareholders with growing dividends, and can it maintain its competitive edge in the mining sector? These are questions value investors may ponder as they analyze the company's financial health and future prospects.
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.
