Understanding the Sustainability and Growth of JCI's Dividend Payments
Johnson Controls International PLC (JCI, Financial) recently announced a dividend of $0.37 per share, payable on 2023-10-20, with the ex-dividend date set for 2023-09-22. 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 Johnson Controls International PLCs dividend performance and assess its sustainability.
Company Overview: Johnson Controls International PLC
Johnson Controls manufactures, installs, and services HVAC systems, building management systems and controls, industrial refrigeration systems, and fire and security solutions. Commercial HVAC accounts for about 40% of sales, fire and security represents 40% of sales, and residential HVAC, industrial refrigeration, and other solutions account for the remaining 20% of revenue. In fiscal 2022, Johnson Controls generated over $25 billion in revenue.
Johnson Controls International PLC's Dividend History
Johnson Controls International PLC has maintained a consistent dividend payment record since 1985. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Johnson Controls International PLC's Dividend Yield and Growth
As of today, Johnson Controls International PLC currently has a 12-month trailing dividend yield of 2.58% and a 12-month forward dividend yield of 2.67%. This suggests an expectation of increase dividend payments over the next 12 months.
Over the past three years, Johnson Controls International PLC's annual dividend growth rate was 10.20%. Extended to a five-year horizon, this rate decreased to 5.10% per year. And over the past decade, Johnson Controls International PLC's annual dividends per share growth rate stands at 4.00%.
Based on Johnson Controls International PLC's dividend yield and five-year growth rate, the 5-year yield on cost of Johnson Controls International PLC stock as of today is approximately 3.31%.
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, Johnson Controls International PLC's dividend payout ratio is 0.48.
Johnson Controls International PLC's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Johnson Controls International PLC'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 past 10 years.
Future Outlook: Johnson Controls International PLC's Growth Metrics
To ensure the sustainability of dividends, a company must have robust growth metrics. Johnson Controls International PLC'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 Johnson Controls International PLC's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Johnson Controls International PLC's revenue has increased by approximately 9.70% per year on average, a rate that outperforms than approximately 70.14% 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, Johnson Controls International PLC's earnings increased by approximately 20.20% per year on average, a rate that outperforms than approximately 68.25% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 21.30%, which outperforms than approximately 81.56% of global competitors.
Conclusion
Considering Johnson Controls International PLC's consistent dividend payments, promising dividend growth rate, and sustainable payout ratio, it's clear that the company has a strong commitment to returning value to its shareholders. Furthermore, the company's impressive profitability and growth metrics suggest a positive outlook for its future performance. As such, Johnson Controls International PLC appears to be a compelling choice for investors seeking sustainable dividend income.
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