Assessing the Sustainability and Prospects of ARC Resources Ltd's Dividend
ARC Resources Ltd (AETUF, Financial) recently announced a dividend of $0.17 per share, payable on 2023-10-16, with the ex-dividend date set for 2023-09-28. 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 ARC Resources Ltd's dividend performance and assess its sustainability.
ARC Resources Ltd: A Brief Overview
ARC Resources Ltd is an independent energy company engaged in the acquisition, exploration, development, and production of conventional oil and natural gas in Western Canada. The company produces light, medium, and heavy crude, condensate, natural gas liquids, and natural gas.
ARC Resources Ltd's Dividend History
ARC Resources Ltd has maintained a consistent dividend payment record since 2008. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
ARC Resources Ltd's Dividend Yield and Growth
As of today, ARC Resources Ltd currently has a 12-month trailing dividend yield of 2.73% and a 12-month forward dividend yield of 3.13%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, ARC Resources Ltd's annual dividend growth rate was -6.50%. Extended to a five-year horizon, this rate decreased to -10.60% per year. And over the past decade, ARC Resources Ltd's annual dividends per share growth rate stands at -13.70%.
Based on ARC Resources Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of ARC Resources Ltd stock as of today is approximately 1.56%.
ARC Resources Ltd's Dividend Sustainability
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, ARC Resources Ltd's dividend payout ratio is 0.15.
ARC Resources Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks ARC Resources Ltd's profitability 8 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported net profit in 7 years out of past 10 years.
ARC Resources Ltd's Growth Metrics
To ensure the sustainability of dividends, a company must have robust growth metrics. ARC Resources 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 ARC Resources Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. ARC Resources Ltd's revenue has increased by approximately 59.90% per year on average, a rate that outperforms approximately 94.55% of global competitors.
Conclusion
ARC Resources Ltd's consistent dividend payments, combined with its solid growth metrics and profitability, make it a compelling choice for value investors. Despite the negative dividend growth rate over the past years, the company's strong revenue growth and low payout ratio suggest a potential for future dividend growth. As always, investors are advised to do their due diligence before making investment decisions.
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