Assessing the Upcoming Dividend Payout and Financial Health of Linde PLC
Linde PLC (LIN, Financial) recently announced a dividend of $1.28 per share, payable on 2023-12-18, with the ex-dividend date set for 2023-12-01. 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 Linde PLC's dividend performance and assess its sustainability.
What Does Linde PLC Do?
Linde is the largest industrial gas supplier in the world, with operations in over 100 countries. The firm's main products are atmospheric gases (including oxygen, nitrogen, and argon) and process gases (including hydrogen, carbon dioxide, and helium), as well as equipment used in industrial gas production. Linde serves a wide variety of end markets, including chemicals, manufacturing, healthcare, and steelmaking. Linde generated approximately $33 billion in revenue and $5.4 billion in GAAP operating profit in 2022.
A Glimpse at Linde PLC's Dividend History
Linde PLC has maintained a consistent dividend payment record since 1992, with dividends currently distributed on a quarterly basis. Moreover, Linde PLC has increased its dividend each year since 1996, earning the prestigious title of a dividend aristocrat. Below is a chart showing annual Dividends Per Share to track historical trends.
Breaking Down Linde PLC's Dividend Yield and Growth
As of today, Linde PLC currently has a 12-month trailing dividend yield of 1.20% and a 12-month forward dividend yield of 1.22%, indicating an expectation of increased dividend payments over the next 12 months. However, Linde PLC's dividend yield of 1.20% is near a 10-year low and underperforms 65.18% of global competitors in the Chemicals industry, suggesting that the company's dividend yield may not be a compelling proposition for income investors.
Over the past three years, Linde PLC's annual dividend growth rate was 10.20%, with a five-year horizon rate of 8.40% per year, and a decade-long growth rate of 7.30%. Based on Linde PLC's dividend yield and five-year growth rate, the 5-year yield on cost as of today is approximately 1.80%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. Linde PLC's dividend payout ratio is 0.41 as of 2023-09-30, suggesting that the company retains a significant part of its earnings for future growth and unexpected downturns. Linde PLC's profitability rank is 8 out of 10, indicating good profitability prospects. The company has also reported positive net income each year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
Linde PLC's growth rank of 8 out of 10 suggests that the company's growth trajectory is strong relative to its competitors. Linde PLC's revenue per share and 3-year revenue growth rate of 8.50% per year, although underperforming 53.93% of global competitors, still indicates a robust revenue model. The company's 3-year EPS growth rate of 18.70% per year and 5-year EBITDA growth rate of 16.60%, while underperforming some global competitors, are nonetheless indicative of a capacity for sustained dividends.
Next Steps
In conclusion, Linde PLC's consistent dividend payments, growth rate, moderate payout ratio, and strong profitability and growth metrics paint a picture of a company with a stable dividend outlook. While the yield may not be the highest in its industry, the company's track record and financial health suggest that it could be a reliable income investment. As Linde PLC continues to navigate the industrial gas market, investors should consider the company's historical performance, current yield, and growth prospects when evaluating its dividends. For those seeking high-dividend yield stocks, GuruFocus Premium users can utilize the High Dividend Yield Screener for further research.
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.
