An In-depth Look at Var Energi ASA's Dividend Performance and Sustainability
Var Energi ASA (VARRY, Financial) recently announced a dividend of $0.22 per share, payable on 2023-12-01, with the ex-dividend date set for 2023-11-03. 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 look into Var Energi ASAs dividend performance and assess its sustainability.
What Does Var Energi ASA Do?
Var Energi ASA is an independent upstream oil and gas company operating on the Norwegian continental shelf. It focuses on the exploration for and production of petroleum in Norway. The company's revenues are mainly derived from the sale of oil, gas, and NGL.
A Glimpse at Var Energi ASA's Dividend History
Var Energi ASA has maintained a consistent dividend payment record since 2022, with dividends currently distributed on a quarterly basis. The company has increased its dividend each year since -, earning it 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.
Breaking Down Var Energi ASA's Dividend Yield and Growth
As of today, Var Energi ASA currently has a 12-month trailing dividend yield of 14.28% and a 12-month forward dividend yield of 13.94%. This suggests an expectation of decreased dividend payments over the next 12 months.
Based on Var Energi ASA's dividend yield and five-year growth rate, the 5-year yield on cost of Var Energi ASA stock as of today is approximately 14.28%.
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 2023-09-30, Var Energi ASA's dividend payout ratio is 1.15, which may suggest that the company's dividend may not be sustainable.
Var Energi ASA's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Var Energi ASA's profitability 5 out of 10 as of 2023-09-30, suggesting fair profitability. The company has reported net profit in 3 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Var Energi ASA's growth rank of 5 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and Var Energi ASA's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Var Energi ASA's revenue has increased by approximately 56.00% per year on average, a rate that outperforms approximately 94.09% 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, Var Energi ASA's earnings increased by approximately 136.70% per year on average, a rate that outperforms approximately 95.19% of global competitors.
Conclusion
Var Energi ASA's consistent dividend payment record, combined with its robust growth metrics, paints a promising picture for investors. However, its high payout ratio and the expected decrease in dividend payments over the next 12 months raise concerns about the sustainability of its dividends. Investors would need to keep a close eye on the company's profitability and growth metrics to gauge the future prospects of its dividends.
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
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.
