An In-depth Look at UPM-Kymmene Oyj's Dividend History, Yield, and Growth
UPM-Kymmene Oyj (UPMMY, Financial), a Finnish paper and biomaterials company, recently announced a dividend of $0.82 per share, payable on 2023-11-16, with the ex-dividend date set for 2023-10-25. As investors anticipate this upcoming payment, it's crucial to examine the company's dividend history, yield, and growth rates. Using data from GuruFocus, we delve into UPM-Kymmene Oyj's dividend performance and evaluate its sustainability.
About UPM-Kymmene Oyj
UPM-Kymmene Oyj is a global player in the forestry industry, producing products such as paper, pulp, and plywood. The company also generates electricity in Finland and is a significant producer of self-adhesive labeling materials. It delivers responsible solutions and innovation for a future beyond fossils across six business areas: UPM Fibres, UPM Energy, UPM Raflatac, UPM Specialty Papers, UPM Communication Papers, and UPM Plywood. Geographically, UPM-Kymmene Oyj has operational footprints in Sweden, Finland, the Netherlands, among other regions.
UPM-Kymmene Oyj's Dividend History
UPM-Kymmene Oyj has maintained a consistent dividend payment record since 2020, with dividends currently distributed bi-annually. The chart below shows the annual Dividends Per Share for historical trend tracking.
UPM-Kymmene Oyj's Dividend Yield and Growth
As of today, UPM-Kymmene Oyj boasts a 12-month trailing dividend yield of 2.54% and a 12-month forward dividend yield of 5.09%. This suggests an expectation of increased dividend payments over the next 12 months. Extended to a five-year horizon, this rate increases to 5.70% per year. Over the past decade, UPM-Kymmene Oyj's annual dividends per share growth rate stands at an impressive 10.50%.
Based on UPM-Kymmene Oyj's dividend yield and five-year growth rate, the 5-year yield on cost of UPM-Kymmene Oyj stock as of today is approximately 3.35%.
Payout Ratio and Profitability: Assessing Dividend Sustainability
To assess the sustainability of the dividend, we examine 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, UPM-Kymmene Oyj's dividend payout ratio is 0.29.
UPM-Kymmene Oyj's profitability rank of 7 out of 10 suggests good profitability prospects. The company has reported positive net income each year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
UPM-Kymmene Oyj's growth rank of 7 out of 10 suggests a good growth trajectory relative to its competitors. The company's revenue per share and 3-year revenue growth rate indicate a strong revenue model, with an average increase of approximately 4.60% per year. However, this rate underperforms approximately 59.41% 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, UPM-Kymmene Oyj's earnings increased by approximately 12.90% per year on average, a rate that underperforms approximately 58.17% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 3.40% underperforms approximately 62.04% of global competitors.
Conclusion
Overall, UPM-Kymmene Oyj's consistent dividend payments, impressive dividend growth rate, and reasonable payout ratio reflect its commitment to rewarding shareholders. While the company's profitability and growth metrics indicate a solid foundation for future dividend sustainability, investors should be mindful of the competitive landscape and the company's relative performance. To sustain and grow dividends in the long run, UPM-Kymmene Oyj must continue to demonstrate robust earnings and revenue growth.
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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.
