Assessing the Sustainability of Fortune Brands Innovations Inc's Dividend
Fortune Brands Innovations Inc (FBIN, Financial) recently announced a dividend of $0.23 per share, payable on 2023-12-13, with the ex-dividend date set for 2023-11-22. 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 Fortune Brands Innovations Inc's dividend performance and assess its sustainability.
What Does Fortune Brands Innovations Inc Do?
Fortune Brands Innovations is a leading home and security products company that operates two segments. The company's $2.6 billion plumbing segment, led by the Moen brand, sells faucets, showers, and other plumbing fixtures, and the $2.2 billion outdoors and security segment sells entry doors under the Therma-Tru brand name, Fiberon-branded patio decking, and locks and other security devices under the Master Lock and SentrySafe brand names.
A Glimpse at Fortune Brands Innovations Inc's Dividend History
Fortune Brands Innovations Inc has maintained a consistent dividend payment record since 2013. Dividends are currently distributed on a quarterly basis. Fortune Brands Innovations Inc has increased its dividend each year since 2013. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 10 years.
Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Fortune Brands Innovations Inc's Dividend Yield and Growth
As of today, Fortune Brands Innovations Inc currently has a 12-month trailing dividend yield of 1.45% and a 12-month forward dividend yield of 1.39%. This suggests an expectation of decreased dividend payments over the next 12 months.
Over the past three years, Fortune Brands Innovations Inc's annual dividend growth rate was 8.40%. Extended to a five-year horizon, this rate increased to 9.20% per year. Based on Fortune Brands Innovations Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Fortune Brands Innovations Inc stock as of today is approximately 2.25%.
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, Fortune Brands Innovations Inc's dividend payout ratio is 0.28.
Fortune Brands Innovations Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Fortune Brands Innovations Inc's profitability 7 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Fortune Brands Innovations Inc'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 Fortune Brands Innovations Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Fortune Brands Innovations Inc's revenue has increased by approximately -4.10% per year on average, a rate that underperforms than approximately 69.7% 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, Fortune Brands Innovations Inc's earnings increased by approximately 8.90% per year on average, a rate that underperforms than approximately 45.34% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 6.80%, which underperforms than approximately 45.22% of global competitors.
Conclusion: A Comprehensive Look at Fortune Brands Innovations Inc's Dividend Profile
In conclusion, Fortune Brands Innovations Inc's track record of consistent dividends and its status as a dividend achiever highlight its commitment to shareholder returns. The company's robust dividend growth rates, combined with a reasonable payout ratio and strong profitability rank, present an optimistic picture for dividend sustainability. However, investors should also consider the mixed signals from the company's growth metrics, including the underperforming revenue and earnings growth rates relative to peers. As value investors weigh these factors, they must consider both the historical performance and the future prospects of Fortune Brands Innovations Inc. Will the company's strategic initiatives and market position enable it to continue its dividend growth, or will challenges in growth metrics necessitate a reevaluation of expectations? GuruFocus Premium users can explore these questions further using tools like the High Dividend Yield Screener to identify other high-dividend yield stocks.
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.
