An in-depth analysis of the company's dividend history, yield, growth, and the factors determining its sustainability
Shenzhou International Group Holdings Ltd (SHZHY, Financial) recently announced a dividend of $0.12 per share, payable on 2023-10-13, with the ex-dividend date set for 2023-09-11. 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 deep dive into Shenzhou International Group Holdings Ltd's dividend performance and assess its sustainability.
A Brief Overview of Shenzhou International Group Holdings Ltd
Shenzhou International Group Holdings Ltd is the world's most vertically integrated knitwear manufacturer. The group mainly produces sportswear (74% of 2021 revenue), casual wear (20% of 2021 revenue), and lingerie (4% of 2021 revenue) for international clients such as Nike, Adidas, Puma, and Uniqlo. Mainland China is the company's largest market, accounting for 32% of sales in 2021, followed by Europe, the U.S., and Japan. Shenzhou currently operates manufacturing plants in China, Cambodia, and Vietnam.
Shenzhou International Group Holdings Ltd's Dividend History
Shenzhou International Group Holdings Ltd has maintained a consistent dividend payment record since 2017, with dividends currently distributed on a bi-annually basis. The annual Dividends Per Share chart below provides a historical trend overview.
Shenzhou International Group Holdings Ltd's Dividend Yield and Growth
As of today, Shenzhou International Group Holdings Ltd currently has a 12-month trailing dividend yield of 2.56% and a 12-month forward dividend yield of 2.41%, indicating an expectation of decreased dividend payments over the next 12 months. Over the past three years, the company's annual dividend growth rate was -4.00%, but this rate increased to 3.40% per year over a five-year horizon. Over the past decade, Shenzhou International Group Holdings Ltd's annual dividends per share growth rate stands at an impressive 18.20%. Based on the company's dividend yield and five-year growth rate, the 5-year yield on cost of Shenzhou International Group Holdings Ltd stock as of today is approximately 3.03%.
Assessing Dividend Sustainability: 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 2023-06-30, Shenzhou International Group Holdings Ltd's dividend payout ratio is 0.59. Shenzhou International Group Holdings Ltd's profitability rank of 9 out of 10 as of 2023-06-30 suggests 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. Shenzhou International Group Holdings Ltd's growth rank of 9 out of 10 suggests a good growth trajectory relative to its competitors. The company's revenue has increased by approximately 7.10% per year on average, a rate that outperforms approximately 63.17% of global competitors. During the past three years, Shenzhou International Group Holdings Ltd's earnings increased by approximately -3.40% per year on average, a rate that outperforms approximately 32.43% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 0.10% outperforms approximately 34.84% of global competitors.
Conclusion
Given Shenzhou International Group Holdings Ltd's consistent dividend payment history, robust dividend growth rate, sustainable payout ratio, high profitability, and solid growth metrics, the company presents a promising dividend investment. However, investors should always consider the overall financial health and market conditions before making investment decisions. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
