Exploring dividend history, growth, and sustainability of Exxaro Resources Ltd (EXXAF, Financial)
Exxaro Resources Ltd (EXXAF) recently announced a dividend of $11.43 per share, payable on 2023-10-02, with the ex-dividend date set for 2023-09-27. 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 Exxaro Resources Ltd's dividend performance and assess its sustainability.
What Does Exxaro Resources Ltd Do?
Exxaro Resources Ltd is one of the South Africa-based diversified resources companies. The company has five operating segments: Coal, Ferrous, TiO2, Energy, and Others. The majority of its revenue comes from the coal segment, whose operations are located in the Waterberg and Mpumalanga regions and are split between coal commercial operations and coal-tied operations and produce thermal and metallurgical coal. Its geographical segments are RSA, Europe, Asia, and others, out of which the majority are from the RSA ( Republic of South Africa).
A Glimpse at Exxaro Resources Ltd's Dividend History
Exxaro Resources Ltd has maintained a consistent dividend payment record since 2008. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Exxaro Resources Ltd's Dividend Yield and Growth
As of today, Exxaro Resources Ltd currently has a 12-month trailing dividend yield of 15.84% and a 12-month forward dividend yield of 12.60%. This suggests an expectation of decrease dividend payments over the next 12 months.
Over the past three years, Exxaro Resources Ltd's annual dividend growth rate was 24.90%. Extended to a five-year horizon, this rate increased to 34.80% per year. And over the past decade, Exxaro Resources Ltd's annual dividends per share growth rate stands at an impressive 21.80%.
Based on Exxaro Resources Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Exxaro Resources Ltd stock as of today is approximately 70.50%.
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, Exxaro Resources Ltd's dividend payout ratio is 0.58.
Exxaro Resources Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Exxaro Resources Ltd's profitability 9 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.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Exxaro Resources Ltd's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Exxaro Resources Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Exxaro Resources Ltd's revenue has increased by approximately 23.20% per year on average, a rate that outperforms approximately 55.83% 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, Exxaro Resources Ltd's earnings increased by approximately 23.00% per year on average, a rate that outperforms approximately 38.66% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 41.40%, outperforms approximately 79.01% of global competitors.
Next Steps
The analysis above paints a promising picture for Exxaro Resources Ltd's dividends. The company's consistent dividend payments, strong growth rate, sustainable payout ratio, impressive profitability, and robust growth metrics all point towards a healthy dividend outlook. However, as with all investments, it's crucial for investors to conduct their own due diligence. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
