Exploring the Sustainability and Growth of DHL Group's Dividends
DHL Group (DHLGY, Financial) recently announced a dividend of $2.01 per share, payable on 2024-05-14, with the ex-dividend date set for 2024-05-06. 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 DHL Group's dividend performance and assess its sustainability.
What Does DHL Group Do?
Based in Germany, DHL Group ranks among the largest parcel-shipping and third-party logistics providers globally. Its DHL divisions (international express shipping, air and ocean freight forwarding, contract logistics, and e-commerce solutions) generate roughly 80% of revenue. Roughly 20% of revenue comes from the Post and Parcel Germany division, which includes the legacy postal business and the German small-package delivery business.
A Glimpse at DHL Group's Dividend History
DHL Group has maintained a consistent dividend payment record since 2011. Dividends are currently distributed on a yearly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down DHL Group's Dividend Yield and Growth
As of today, DHL Group currently has a 12-month trailing dividend yield of 4.63% and a 12-month forward dividend yield of 4.61%. This suggests an expectation of decrease dividend payments over the next 12 months.
Over the past three years, DHL Group's annual dividend growth rate was 17.20%. Extended to a five-year horizon, this rate decreased to 11.70% per year. And over the past decade, DHL Group's annual dividends per share growth rate stands at 9.70%.
Based on DHL Group's dividend yield and five-year growth rate, the 5-year yield on cost of DHL Group stock as of today is approximately 8.05%.
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, DHL Group's dividend payout ratio is 0.60.
DHL Group's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks DHL Group's profitability 8 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. DHL Group'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 DHL Group's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. DHL Group's revenue has increased by approximately 8.60% per year on average, a rate that outperforms approximately 50.27% 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, DHL Group's earnings increased by approximately 8.70% per year on average, a rate that outperforms approximately 43.22% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 20.40%, which outperforms approximately 66.67% of global competitors.
Next Steps
Considering DHL Group's consistent dividend payments, robust dividend growth rate, sustainable payout ratio, strong profitability, and solid growth metrics, the company stands as a compelling choice for value investors focused on dividend income. The detailed metrics not only reassure the current investors but also attract potential investors seeking reliable dividend 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.
