An In-depth Analysis of the Mining Service Provider's Dividend Track Record and Future Prospects
Macmahon Holdings Ltd(MCHHF, Financial) recently announced a dividend of $0.01 per share, payable on 2023-10-11, with the ex-dividend date set for 2023-09-19. 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 Macmahon Holdings Ltd's dividend performance and assess its sustainability.
About Macmahon Holdings Ltd
Macmahon Holdings Ltd is an Australian company providing mining services to clients throughout Australia, Southeast Asia, and South Africa. Its complete mining services range from mine development to materials delivery, including design, construction, and on-site services. Macmahon manages mines for mining companies, across a variety of base and precious metals and commodities. Its segments are Surface Mining, Underground Mining, and International Mining. It provides a complete set of mining services which includes surface and underground mining, civil and rehabilitation services, equipment maintenance, rentals, and management.
A Glimpse at Macmahon Holdings Ltd's Dividend History
Macmahon Holdings Ltd has maintained a consistent dividend payment record since 2019. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Macmahon Holdings Ltd's Dividend Yield and Growth
As of today, Macmahon Holdings Ltd currently has a 12-month trailing dividend yield of 4.26% and a 12-month forward dividend yield of 4.90%. This suggests an expectation of increase dividend payments over the next 12 months. Over the past three years, Macmahon Holdings Ltd's annual dividend growth rate was -4.40%. Based on Macmahon Holdings Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Macmahon Holdings Ltd stock as of today is approximately 4.26%.
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, Macmahon Holdings Ltd's dividend payout ratio is 0.24. Macmahon Holdings Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Macmahon Holdings Ltd's profitability 7 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported net profit in 8 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Macmahon Holdings Ltd'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 Macmahon Holdings Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Macmahon Holdings Ltd's revenue has increased by approximately 12.60% per year on average, a rate that outperforms than approximately 52.97% 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, Macmahon Holdings Ltd's earnings increased by approximately -3.50% per year on average, a rate that outperforms than approximately 36.8% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 4.90%, which outperforms than approximately 34.58% of global competitors.
Conclusion
Overall, Macmahon Holdings Ltd's consistent dividend payments, reasonable payout ratio, and robust growth metrics indicate a promising future for the company's dividends. While the past three years have seen a slight decline in the dividend growth rate, the company's strong profitability and growth rank suggest potential for improvement. With a forward dividend yield of 4.90%, the company's dividends are expected to increase over the next 12 months, offering attractive returns for dividend-focused investors. As always, it's crucial for investors to conduct their due diligence and consider all aspects of the company's financial health before making investment decisions.
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