Assessing Dividend Performance and Sustainability
Epiroc AB (EPOKY, Financial) recently announced a dividend of $0.15 per share, payable on 2023-11-13, with the ex-dividend date set for 2023-10-23. 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 delve into Epiroc AB's dividend performance and assess its sustainability.
What Does Epiroc AB Do?
Epiroc AB is a global manufacturer of niche equipment and services used by mining and infrastructure customers. The company's products include hard rock drilling equipment and excavation technologies for underground and surface mining, as well as servicing and spare parts. Approximately 69% of group sales are from the aftermarket, which includes services and the sale of spare parts and consumables. Epiroc was spun out of Atlas Copco and listed as a stand-alone company on the Nasdaq Stockholm in June 2018.
A Glimpse at Epiroc AB's Dividend History
Epiroc AB has maintained a consistent dividend payment record since 2019. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Epiroc AB's Dividend Yield and Growth
As of today, Epiroc AB currently has a 12-month trailing dividend yield of 1.63% and a 12-month forward dividend yield of 1.71%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Epiroc AB's annual dividend growth rate was 12.60%. Based on Epiroc AB's dividend yield and five-year growth rate, the 5-year yield on cost of Epiroc AB stock as of today is approximately 1.63%.
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, Epiroc AB's dividend payout ratio is 0.40.
Epiroc AB's profitability rank, as of 2023-06-30, is 8 out of 10, suggesting good profitability prospects. The company has reported net profit in 8 years out of the past 10 years.
Growth Metrics: The Future Outlook
Epiroc AB's growth rank of 8 out of 10 suggests a good growth trajectory relative to its competitors. Epiroc AB's revenue has increased by approximately 6.60% per year on average, a rate that outperforms approximately 51.23% 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, Epiroc AB's earnings increased by approximately 12.40% per year on average, a rate that outperforms approximately 47.17% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 12.30% outperforms approximately 56.25% of global competitors.
Conclusion
In conclusion, Epiroc AB's consistent dividend payments, solid growth rate, reasonable payout ratio, and strong profitability and growth metrics indicate a promising future for the company. These factors suggest that Epiroc AB is well-positioned to sustain its dividends in the long run, making it a potential choice for investors seeking steady dividend income.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
