A Comprehensive Examination of Kenvue Inc's Dividend Performance and Sustainability
Kenvue Inc (KVUE, Financial) recently announced a dividend of $0.2 per share, payable on 2023-11-22, with the ex-dividend date set for 2023-11-07. As investors look forward to this upcoming payment, attention is also drawn to the company's dividend history, yield, and growth rates. Using data from GuruFocus, this article delves into Kenvue Inc's dividend performance and assesses its sustainability.
About Kenvue Inc
Kenvue Inc is the world's largest pure-play consumer health company by sales, generating $15 billion in annual revenue. Formerly known as Johnson & Johnson's consumer segment, Kenvue Inc spun off and went public in May 2023. The company operates in various consumer health silos, including cough, cold and allergy care, pain management, face and body care, oral care, and women's health. Its portfolio includes globally recognized brands like Tylenol, Listerine, Johnson's, Aveeno, and Neutrogena. Despite operating in a fragmented industry with intense competition and changing consumer preferences, many of Kenvue Inc's brands lead their respective segments due to their strong brand power.
Kenvue Inc's Dividend History
Since 2023, Kenvue Inc has maintained a consistent dividend payment record with quarterly distributions. The company has increased its dividend each year since its inception, earning it the status of a dividend king, a title bestowed upon companies that have consistently raised their dividends for at least 2023 years.
Kenvue Inc's Dividend Yield and Growth
As of today, Kenvue Inc has a 12-month trailing dividend yield of 1.03% and a 12-month forward dividend yield of 4.13%. This suggests an expectation of increased dividend payments over the next 12 months. Kenvue Inc's dividend yield of 1.03% nears a 10-year high and outperforms 19.98% of global competitors in the Consumer Packaged Goods industry, making it an attractive proposition for income investors.
The 5-year yield on cost of Kenvue Inc stock is approximately 1.03% as of today, based on its dividend yield and five-year growth rate.
Assessing Dividend Sustainability: Payout Ratio and Profitability
The sustainability of Kenvue Inc's dividend can be evaluated by examining its payout ratio. The dividend payout ratio offers insight 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 2023-09-30, Kenvue Inc's dividend payout ratio is 0.36.
Kenvue Inc's profitability rank of 4 out of 10 as of 2023-09-30 suggests that the dividend may not be sustainable. The company has reported net profit in 3 out of the past 10 years.
Future Outlook: Growth Metrics
Kenvue Inc's growth rank of 4 out of 10 suggests poor growth prospects, implying that the dividend may not be sustainable. The company's revenue per share and 3-year revenue growth rate indicate a strong revenue model, with an average annual increase of approximately 1.40%. However, this rate underperforms approximately 69.07% 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, Kenvue Inc's earnings increased by approximately -9.70% per year on average, a rate that underperforms approximately 69.63% of global competitors.
Conclusion
In conclusion, while Kenvue Inc has a commendable history of dividend payments and growth, its current payout ratio and profitability rank raise questions about the sustainability of its dividends. Furthermore, the company's growth metrics suggest poor future prospects, which could impact its ability to sustain dividends. Therefore, investors should carefully consider these factors before making investment decisions. 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.
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