Assessing the Upcoming Dividend and Financial Health of Saputo Inc
Saputo Inc (SAPIF, Financial) recently announced a dividend of $0.19 per share, payable on 2023-12-15, with the ex-dividend date set for 2023-12-04. 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 Saputo Inc's dividend performance and assess its sustainability.
What Does Saputo Inc Do?
Saputo Inc is a global dairy processor domiciled in Canada (26% of fiscal 2023 sales) with operations in the United States (47%), the U.K. (6%), and other international markets (21%). It sells cheese, cream, fluid milk, and other dairy products. In the retail segment (48% of revenue), its mix of brands includes Saputo, Armstrong, Cheer, Cathedral City, and Frylight. Saputo Inc also competes in foodservice (33% of revenue) and industrials (19% of revenue), which houses its ingredients business.
A Glimpse at Saputo Inc's Dividend History
Saputo Inc has maintained a consistent dividend payment record since 2003, with dividends currently distributed on a quarterly basis. Recognized as a dividend achiever, Saputo Inc has increased its dividend each year since 2004, marking at least 19 years of consecutive dividend growth—a testament to its financial stability and commitment to shareholders.
Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Saputo Inc's Dividend Yield and Growth
As of today, Saputo Inc currently has a 12-month trailing dividend yield of 2.80% and a 12-month forward dividend yield of 2.80%. This suggests an expectation of consistent dividend payments over the next 12 months.
Saputo Inc's dividend yield of 2.80% is near a 10-year high and outperforms 60.97% of global competitors in the Consumer Packaged Goods industry, suggesting that the company's dividend yield stands out as an attractive proposition for income investors.
Over the past three years, Saputo Inc's annual dividend growth rate was 2.20%. Extended to a five-year horizon, this rate increased to 2.80% per year. And over the past decade, Saputo Inc's annual dividends per share growth rate stands at 5.80%.
Based on Saputo Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Saputo Inc stock as of today is approximately 3.21%.
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, Saputo Inc's dividend payout ratio is 0.48, suggesting a balance between returning value to shareholders and retaining earnings for growth.
Saputo Inc's profitability rank of 8 out of 10 as of 2023-09-30, combined with a decade-long track record of positive net income, underscores its robust financial position and ability to sustain dividend payments.
Growth Metrics: The Future Outlook
For dividends to remain sustainable, a company must exhibit solid growth metrics. Saputo Inc's growth rank of 8 out of 10 suggests a favorable growth trajectory compared to its competitors. However, while Saputo Inc's revenue per share and 3-year revenue growth rate indicate a strong revenue model with an average annual increase of 4.70%, it underperforms 57.22% of global competitors.
The company's 5-year EBITDA growth rate of -3.10%, which underperforms 70.06% of global competitors, raises concerns about its efficiency and profitability in the longer term.
Concluding Thoughts on Saputo Inc's Dividend Outlook
In conclusion, Saputo Inc's consistent dividend growth, attractive yield, and solid profitability present a compelling case for income-focused investors. While the payout ratio indicates a sustainable dividend policy, the mixed growth metrics could be an area for closer scrutiny. Investors may want to weigh the company's long-standing history of dividend increases against the slower revenue and EBITDA growth rates when considering the future prospects of their investment. For those seeking to expand their portfolio with high-dividend yield stocks, GuruFocus Premium offers a High Dividend Yield Screener as a valuable resource for investment opportunities.
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.
