A deep dive into Cashbuild Ltd's upcoming dividend, its history, yield, growth rates, and sustainability
Cashbuild Ltd (CBLDF, Financial) recently announced a dividend of $3.32 per share, payable on 2023-09-26, 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 Cashbuild Ltd's dividend performance and assess its sustainability.
Introducing Cashbuild Ltd
Cashbuild Ltd is a South Africa-based company engaged in the retailing of building materials and associated products. The firm primarily operates stores in South Africa and the neighboring countries of Botswana, Swaziland, Lesotho, Namibia, and Malawi through its subsidiaries. Its stores are mostly located in towns, as well as townships, rural areas, and metropolitan settings. Cashbuild's products include cement, roofing, openings, timber, bricks, decorative, plumbing, hardware, ceilings, electrical, and tools. A sizable amount of its products are cement-related. The firm's customers include home-builders, contractors, farmers, traders and construction companies, as well as government-related infrastructure developers.
Understanding Cashbuild Ltd's Dividend History
Cashbuild Ltd has maintained a consistent dividend payment record since 2020. Dividends are currently distributed on a bi-annual basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Decoding Cashbuild Ltd's Dividend Yield and Growth
As of today, Cashbuild Ltd currently has a 12-month trailing dividend yield of 5.96% and a 12-month forward dividend yield of 3.59%. This suggests an expectation of decreased dividend payments over the next 12 months.
Over the past three years, Cashbuild Ltd's annual dividend growth rate was 8.00%. Extended to a five-year horizon, this rate increased to 15.20% per year. And over the past decade, Cashbuild Ltd's annual dividends per share growth rate stands at an impressive 11.00%.
Based on Cashbuild Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Cashbuild Ltd stock as of today is approximately 12.09%.
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, Cashbuild Ltd's dividend payout ratio is 2.36. This may suggest that the company's dividend may not be sustainable.
Cashbuild Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Cashbuild 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.
Probing Cashbuild Ltd's Growth Metrics
To ensure the sustainability of dividends, a company must have robust growth metrics. Cashbuild 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 Cashbuild Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Cashbuild Ltd's revenue has increased by approximately 2.60% per year on average, a rate that underperforms approximately 53.24% 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, Cashbuild Ltd's earnings increased by approximately -27.10% per year on average, a rate that underperforms approximately 86.11% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -15.20%, underperforms approximately 86.36% of global competitors.
Conclusion
In conclusion, while Cashbuild Ltd has shown a consistent dividend payout history and a decent dividend yield, the sustainability of its dividends is questionable due to its high payout ratio. However, the company's strong profitability and growth ranks indicate a potential for future earnings growth. Therefore, investors should keep a close eye on Cashbuild Ltd's financial performance and strategic initiatives in the coming quarters to make informed investment decisions.
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