Unraveling the company's dividend performance, sustainability, and growth prospects
Adcock Ingram Holdings Ltd (AIHLF, Financial) recently announced a dividend of $1.25 per share, payable on 2023-09-18, with the ex-dividend date set for 2023-09-13. 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 Adcock Ingram Holdings Ltd's dividend performance and assess its sustainability.
What Does Adcock Ingram Holdings Ltd Do?
Adcock Ingram Holdings Ltd is a drug manufacturing company. The company manufactures, markets, and distributes a wide range of healthcare products. The company generates roughly two-thirds of its sales from the private sector, with the remaining from the public sector. Adcock operates in four broad areas: renal disease, medicine delivery, transfusion therapies, and blood and specialized pharmaceuticals. The company generates the vast majority of its revenue in southern Africa, followed by the rest of Africa and India.
A Glimpse at Adcock Ingram Holdings Ltd's Dividend History
Adcock Ingram Holdings Ltd has maintained a consistent dividend payment record since 2021. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Adcock Ingram Holdings Ltd's Dividend Yield and Growth
As of today, Adcock Ingram Holdings Ltd currently has a 12-month trailing dividend yield of 5.29% and a 12-month forward dividend yield of 5.42%. This suggests an expectation of increased dividend payments over the next 12 months.
Adcock Ingram Holdings Ltd's dividend yield of 5.29% is near a 10-year high and outperforms than 87.85 of global competitors in the Drug Manufacturers industry, suggesting that the company's dividend yield stands out as an attractive proposition for income investors.
Over the past three years, Adcock Ingram Holdings Ltd's annual dividend growth rate was 5.40%. Extended to a five-year horizon, this rate decreased to 3.00% per year.
Based on Adcock Ingram Holdings Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Adcock Ingram Holdings Ltd stock as of today is approximately 6.13%.
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 2023-06-30, Adcock Ingram Holdings Ltd's dividend payout ratio is 0.43.
Adcock Ingram Holdings Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Adcock Ingram Holdings Ltd's profitability 8 out of 10 as of 2023-06-30, 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. Adcock Ingram Holdings Ltd'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 Adcock Ingram Holdings Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Adcock Ingram Holdings Ltd's revenue has increased by approximately 8.90% per year on average, a rate that outperforms than approximately 60.17% 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, Adcock Ingram Holdings Ltd's earnings increased by approximately 11.30% per year on average, a rate that outperforms than approximately 49.58% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 6.90%, which outperforms than approximately 47.5% of global competitors.
Next Steps
In conclusion, Adcock Ingram Holdings Ltd's consistent dividend payments, above-average dividend growth rate, reasonable payout ratio, and strong profitability and growth metrics make it an attractive proposition for dividend investors. However, investors should always consider the overall financial health of the company and the broader market conditions before making an investment decision. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
