Understanding the Dividend Performance and Sustainability of OCI NV (OCINF, Financial)
OCI NV(OCINF) recently announced a dividend of $0.85 per share, payable on 2023-10-31, with the ex-dividend date set for 2023-10-26. 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 OCI NV's dividend performance and assess its sustainability.
Company Overview: OCI NV
OCI NV manufactures and sells a variety of fertilizers and natural gas-based chemicals. The firm organizes itself into five reportable segments based on product type and location. The methanol U.S. segment distributes methanol and ammonia primarily to industrial customers around the U.S. Gulf Coast. Methanol Europe produces and distributes regular and bio-methanol. Other segments include nitrogen U.S., nitrogen Europe, and fertiglobe, which is a nitrogen fertilizer platform serving the Middle East and North Africa. Majority revenue is generated from the Fertiglobe segment. The company generates most of its revenue from Europe and the Americas.
OCI NV's Dividend History
OCI NV has maintained a consistent dividend payment record since 2022. Dividends are currently distributed on a bi-annually basis. The company has increased its dividend each year since -, earning the title of a dividend king, an honor given to companies that have increased their dividend each year for at least the past 2023 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
OCI NV's Dividend Yield and Growth
As of today, OCI NV currently has a 12-month trailing dividend yield of 31.06% and a 12-month forward dividend yield of 19.96%. This suggests an expectation of decreased dividend payments over the next 12 months. Based on OCI NV's dividend yield and five-year growth rate, the 5-year yield on cost of OCI NV stock as of today is approximately 31.06%.
The Sustainability of OCI NV's Dividend
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, OCI NV's dividend payout ratio is 8.39, which may suggest that the company's dividend may not be sustainable. OCI NV's profitability rank of 7 out of 10 as of 2023-06-30, suggests good profitability prospects. The company has reported net profit in 6 years out of past 10 years.
OCI NV's Growth Metrics
To ensure the sustainability of dividends, a company must have robust growth metrics. OCI NV's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Revenue is the lifeblood of any company, and OCI NV's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. OCI NV's revenue has increased by approximately 49.30% per year on average, a rate that outperforms approximately 96.07% of global competitors.
Conclusion
While OCI NV's consistent dividend payment record and high yield are attractive, investors should also consider the company's payout ratio and growth metrics to ensure the sustainability of these dividends. The company's profitability and growth ranks, along with its impressive revenue growth, suggest a strong potential for future growth. However, a relatively low payout ratio may raise concerns about the sustainability of the dividend. Therefore, investors should carefully consider these factors before making investment decisions.
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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.
