Assessing the Sustainability of Dow Inc's Dividend Payments
Dow Inc (DOW, Financial) recently announced a dividend of $0.7 per share, payable on 2023-12-08, with the ex-dividend date set for 2023-11-29. 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 Dow Inc's dividend performance and assess its sustainability.
What Does Dow Inc Do?
Dow Inc is a diversified global chemicals producer, formed in 2019 as a result of the DowDuPont merger and subsequent separations. The firm is a leading producer of several chemicals, including polyethylene, ethylene oxide, and silicone rubber. Its products have numerous applications in both consumer and industrial end markets.
A Glimpse at Dow Inc's Dividend History
Dow Inc has maintained a consistent dividend payment record since 2019, distributing dividends on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Dow Inc's Dividend Yield and Growth
Dow Inc currently has a 12-month trailing dividend yield of 5.50% and a 12-month forward dividend yield of 5.50%, suggesting an expectation of consistent dividend payments over the next 12 months. Over the past three years, Dow Inc's annual dividend growth rate was 10.10%. The 5-year yield on cost of Dow Inc stock as of today is approximately 5.50%.
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. As of 2023-09-30, Dow Inc's dividend payout ratio is 1.52, which may suggest that the company's dividend may not be sustainable. Dow Inc's profitability rank of 6 out of 10 as of 2023-09-30, suggests fair profitability, with the company reporting net profit in 6 years out of the past 10 years.
Growth Metrics: The Future Outlook
Dow Inc's growth rank of 6 out of 10 suggests a fair growth outlook. The company's robust revenue model is evidenced by its revenue per share and a 3-year revenue growth rate of 10.70% per year on average, outperforming approximately 53.52% of global competitors. Furthermore, Dow Inc's earnings have increased by approximately 52.20% per year on average over the past three years, outperforming approximately 85.16% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 37.70% outperforms approximately 87.34% of global competitors.
Next Steps
In conclusion, while Dow Inc's dividend payments and growth rates are appealing, investors should closely monitor the high payout ratio and assess it in the context of the company's profitability and growth metrics. The future sustainability of dividends will hinge on Dow Inc's ability to maintain its profitability and growth trajectory. For investors seeking to expand their portfolio with high-dividend yield stocks, GuruFocus Premium offers a High Dividend Yield Screener tool for informed decision-making.
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.
