A Deep Dive into the Dividend Performance and Sustainability of JFE Holdings Inc
JFE Holdings Inc (JFEEF, Financial) recently announced a dividend of $50 per share, payable on an unannounced date, 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 JFE Holdings Inc's dividend performance and assess its sustainability.
A Brief Overview of JFE Holdings Inc
JFE Holdings Inc is a Japan-based company operating through three subsidiaries, namely JFE Steel, JFE Engineering and JFE Shoji. JFE Steel produces and sells a wide range of steel products and raw materials, and also operates peripheral businesses such as transporting, maintenance and construction of equipment. JFE Engineering provides engineering services for energy, urban environment, recycle, steel construction and industrial machines and systems. JFE Shoji purchases, processes and sells steel products, raw materials for steel production, nonferrous metal products, food, etc. Steel manufacturing and trading account for majority of JFE's revenue. The company generates most of its sales from the Japanese market.
Understanding JFE Holdings Inc's Dividend History
JFE Holdings Inc has maintained a consistent dividend payment record since 2021. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Analysing JFE Holdings Inc's Dividend Yield and Growth
As of today, JFE Holdings Inc currently has a 12-month trailing dividend yield of 3.68% and a 12-month forward dividend yield of 4.71%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, JFE Holdings Inc's annual dividend growth rate was 58.70%. Extended to a five-year horizon, this rate decreased to 1.40% per year. And over the past decade, JFE Holdings Inc's annual dividends per share growth rate stands at 6.50%. Based on JFE Holdings Inc's dividend yield and five-year growth rate, the 5-year yield on cost of JFE Holdings Inc stock as of today is approximately 3.94%.
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, JFE Holdings Inc's dividend payout ratio is 0.34.
JFE Holdings Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks JFE Holdings Inc's profitability 6 out of 10 as of 2023-06-30, suggesting fair profitability. The company has reported net profit in 8 years out of past 10 years.
Looking Ahead: Growth Metrics and Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. JFE Holdings Inc's growth rank of 6 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and JFE Holdings Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. JFE Holdings Inc's revenue has increased by approximately 12.00% per year on average, a rate that outperforms approximately 54.53% of global competitors.
Concluding Thoughts
With a consistent dividend payment history, a promising yield, and a fair growth outlook, JFE Holdings Inc presents a compelling case for dividend-focused investors. The company's sustainable payout ratio and profitability further add to its appeal. However, like any investment, it's essential to conduct thorough research and consider all financial metrics before making a decision.
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