A comprehensive analysis of IGO Ltd's dividend performance, sustainability, and future growth prospects
IGO Ltd (IPGDF, Financial) recently announced a dividend of $0.44 per share, payable on 2023-09-28, with the ex-dividend date set for 2023-09-13. As investors eagerly anticipate this forthcoming payment, it's crucial to examine the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's delve into IGO Ltd's dividend performance and evaluate its sustainability.
A Snapshot of IGO Ltd's Business
IGO Ltd is engaged in nickel, copper, and cobalt mining and processing at the Nova Operation, upstream and downstream lithium assets via its 49% joint venture interest, and ongoing mineral exploration in Australia and overseas. The company operates in one geographic segment, Australia, and derives the majority of its revenue from the Nova Operation.
Tracing IGO Ltd's Dividend History
IGO Ltd has upheld a consistent dividend payment record since 2011, with dividends currently distributed bi-annually. Tracking its historical trends provides valuable insights into its dividend stability.
Decoding IGO Ltd's Dividend Yield and Growth
As of today, IGO Ltd boasts a 12-month trailing dividend yield of 1.37% and a 12-month forward dividend yield of 4.10%, indicating an expected increase in dividend payments over the next 12 months.
Over the past three years, IGO Ltd's annual dividend growth rate was 11.00%. This rate increased to 50.00% per year over a five-year horizon. Over the past decade, IGO Ltd's annual dividends per share growth rate stands at a remarkable 17.60%.
Based on IGO Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of IGO Ltd stock as of today is approximately 10.40%.
Assessing Dividend Sustainability: Payout Ratio and Profitability
The sustainability of a dividend is evaluated through the company's payout ratio. The dividend payout ratio of IGO Ltd as of 2023-06-30 is 0.26, indicating that the company retains a significant part of its earnings, ensuring funds for future growth and unexpected downturns.
IGO Ltd's profitability rank of 7 out of 10, as of 2023-06-30, suggests good profitability prospects. The company has reported net profit in 9 out of the past 10 years.
Growth Metrics: A Peek into the Future
Robust growth metrics are essential for the sustainability of dividends. IGO Ltd's growth rank of 7 out of 10 suggests a positive growth trajectory relative to its competitors.
IGO Ltd's revenue per share and 3-year revenue growth rate indicate a strong revenue model, even though it underperforms approximately 76.12% of global competitors. The company's 3-year EPS growth rate showcases its ability to grow earnings, a critical component for sustaining dividends in the long run, even though it underperforms approximately 19.87% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 48.40% underperforms approximately 6.78% of global competitors.
Concluding Remarks
IGO Ltd's consistent dividend payments, impressive growth rates, and reasonable payout ratio indicate a promising future for its dividends. However, the company's growth metrics and profitability rank suggest a need for further improvement to sustain dividends in the long run. As investors, it is essential to keep an eye on these factors while making investment decisions.
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