An In-depth Analysis of the Company's Dividend History, Yield, Growth, and Future Prospects
Recently, Weichai Power Co Ltd (WEICF, Financial) announced a dividend of $0.25 per share, to be distributed on 2023-10-27, with the ex-dividend date set for 2023-09-28. As investors anticipate this upcoming payment, it's crucial to examine the company's dividend history, yield, and growth rates. This article, leveraging data from GuruFocus, provides an in-depth analysis of Weichai Power Co Ltd's dividend performance and assesses its sustainability.
Company Overview: What Does Weichai Power Co Ltd Do?
Weichai Power Co Ltd is a diversified industrial technology firm that provides vehicles, equipment, and logistics and supply chain services in China. The company operates across four segments: Engines, Automobiles and automobile components, Agricultural equipment, and Intelligent logistics. The Engines segment focuses on the manufacturing and sale of engines and related parts, while the Automobiles and automobile components segment deals with the manufacturing and sale of automobiles and automobile components. The Agricultural equipment segment is dedicated to the manufacturing and sale of agricultural equipment and related parts. Lastly, the Intelligent logistics segment is engaged in forklift trucks production, warehousing technology, and supply chain solution services.
A Glimpse at Weichai Power Co Ltd's Dividend History
Weichai Power Co Ltd has held a consistent dividend payment record since 2014, with dividends currently distributed bi-annually. The chart below shows the annual Dividends Per Share to track historical trends.
Breaking Down Weichai Power Co Ltd's Dividend Yield and Growth
Currently, Weichai Power Co Ltd has a 12-month trailing dividend yield of 2.70% and a 12-month forward dividend yield of 4.73%, suggesting an expected increase in dividend payments over the next 12 months.
Over the past three years, Weichai Power Co Ltd's annual dividend growth rate was -13.20%. However, over a five-year horizon, this rate increased to -1.10% per year. Impressively, over the past decade, Weichai Power Co Ltd's annual dividends per share growth rate stands at 23.10%. Based on the company's dividend yield and five-year growth rate, the 5-year yield on cost of Weichai Power Co Ltd stock as of today is approximately 2.55%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, it's necessary 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, ensuring the availability of funds for future growth and unexpected downturns. As of 2023-06-30, Weichai Power Co Ltd's dividend payout ratio is 0.38.
Weichai Power Co Ltd's profitability rank of 7 out of 10 as of 2023-06-30, suggests good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
Weichai Power Co Ltd's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors. However, with a revenue per share increase of approximately -2.60% per year on average, the company underperforms approximately 78.43% of global competitors. Additionally, the company's 3-year EPS growth rate of -20.90% per year on average underperforms approximately 85.13% of global competitors. Lastly, the company's 5-year EBITDA growth rate of -5.20% underperforms approximately 79.6% of global competitors.
Conclusion
In conclusion, while Weichai Power Co Ltd has a consistent dividend payment record and good profitability prospects, its growth metrics suggest that the company might face challenges in sustaining its dividends in the long run. Therefore, investors should carefully consider these factors before making investment decisions. For those interested in high-dividend yield stocks, GuruFocus Premium users can leverage the High Dividend Yield Screener.
