A Comprehensive Analysis of Weir Group PLC's Dividend Payouts and Future Prospects
Weir Group PLC(WEGRY, Financial) recently announced a dividend of $0.11 per share, payable on 2023-11-08, with the ex-dividend date set for 2023-10-05. As investors anticipate this upcoming payment, it's essential to scrutinize the company's dividend history, yield, and growth rates. Leveraging data from GuruFocus, let's delve into Weir Group PLC's dividend performance and evaluate its sustainability.
Understanding Weir Group PLC's Business Model
Weir Group PLC manufactures equipment for minerals and other industrial end markets, primarily operating through its Minerals and ESCO segments. The Minerals segment is engaged in engineering, manufacturing, and service processing technology used in abrasive, high-wear mining applications. The ESCO segment provides Ground Engaging Tools (G.E.T.) for large mining machines. Predominantly operating in mining and infrastructure markets, its technology improves productivity through extended wear life, increased safety, and reduced energy consumption. The company generates maximum revenue from the Minerals segment and has a significant presence in South America.
A Retrospective Look at Weir Group PLC's Dividend History
Weir Group PLC has upheld a consistent dividend payment record since 2021, with dividends currently distributed bi-annually. The chart below illustrates the annual Dividends Per Share for tracking historical trends.
Dissecting Weir Group PLC's Dividend Yield and Growth
Currently, Weir Group PLC has a 12-month trailing dividend yield of 1.74% and a 12-month forward dividend yield of 2.08%. This suggests an expectation of increased dividend payments over the next 12 months. However, over the past three years, Weir Group PLC's annual dividend growth rate was -18.10%. Based on Weir Group PLC's dividend yield and five-year growth rate, the 5-year yield on cost of Weir Group PLC stock as of today is approximately 1.74%.
Examining Dividend Sustainability: Payout Ratio and Profitability
The sustainability of a dividend is best assessed by evaluating 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, Weir Group PLC's dividend payout ratio is 0.35. The company's profitability rank of 6 out of 10 suggests fair profitability, with net profit reported in 7 years out of the past 10 years.
Assessing Future Prospects: Growth Metrics
For dividends to be sustainable, a company must demonstrate robust growth metrics. Weir Group PLC's growth rank of 6 out of 10 suggests a fair growth outlook. The company's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. 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. Lastly, the company's 5-year EBITDA growth rate of 8.40% outperforms approximately 48.46% of global competitors.
Conclusion
Despite a negative dividend growth rate in the past three years, Weir Group PLC's consistent dividend payments, fair profitability, and growth metrics suggest potential for future dividend sustainability. However, investors should continue to monitor these factors closely to make informed decisions. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
