Unraveling the Dividend History, Growth, and Prospects of Marriott Vacations Worldwide Corp
Marriott Vacations Worldwide Corp (VAC, Financial) recently announced a dividend of $0.72 per share, payable on 2023-10-05, with the ex-dividend date set for 2023-09-20. 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 Marriott Vacations Worldwide Corp's dividend performance and assess its sustainability.
Understanding Marriott Vacations Worldwide Corp's Business Model
Marriott Vacations Worldwide Corp operates within the United States leisure industry. It owns and manages a cluster of resorts and accommodation facilities under trademarks like Marriott Vacation Club, Grand Residencies, and The Ritz-Carlton Destination Club predominantly in the United States. Some of its properties are also spread across Europe and Asia Pacific. Marriott's major revenue components include the sale of vacation ownership products such as luxurious vacation packages. In addition, it offers purchase money financing to the end users of its core services. The company operates in two reportable segments: Vacation Ownership and Exchange & Third-Party Management, with the majority of revenue derived from the Vacation Ownership segment.
Tracing Marriott Vacations Worldwide Corp's Dividend History
Marriott Vacations Worldwide Corp has maintained a consistent dividend payment record since 2014, with dividends currently distributed on a quarterly basis. The chart below shows annual Dividends Per Share for tracking historical trends.
Dissecting Marriott Vacations Worldwide Corp's Dividend Yield and Growth
As of today, Marriott Vacations Worldwide Corp currently has a 12-month trailing dividend yield of 2.76% and a 12-month forward dividend yield of 2.87%, suggesting an expectation of increased dividend payments over the next 12 months.
Over the past three years, Marriott Vacations Worldwide Corp's annual dividend growth rate was 10.90%. Extended to a five-year horizon, this rate decreased to 1.00% per year. Based on Marriott Vacations Worldwide Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Marriott Vacations Worldwide Corp stock as of today is approximately 2.90%.
Evaluating 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, Marriott Vacations Worldwide Corp's dividend payout ratio is 0.32.
Marriott Vacations Worldwide Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Marriott Vacations Worldwide Corp's profitability 7 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported net profit in 9 years out of the past 10 years.
Gauging Future Prospects: Growth Metrics
To ensure the sustainability of dividends, a company must have robust growth metrics. Marriott Vacations Worldwide Corp'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 Marriott Vacations Worldwide Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Marriott Vacations Worldwide Corp's revenue has increased by approximately 2.50% per year on average, a rate that outperforms approximately 60.37% 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, Marriott Vacations Worldwide Corp's earnings increased by approximately 41.60% per year on average, a rate that outperforms approximately 80.16% of global competitors.
In conclusion, Marriott Vacations Worldwide Corp's consistent dividend payment record, promising dividend growth rate, prudent payout ratio, robust profitability, and solid growth metrics all indicate a sustainable dividend policy. These factors not only make the company an attractive proposition for current investors but also for potential investors seeking steady dividend income. As always, investors are advised to do their own due diligence before making any investment decisions.
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