Understanding the Sustainability of Park Aerospace Corp's Dividend
Park Aerospace Corp (PKE, Financial) recently announced a dividend of $0.13 per share, payable on 2024-02-02, with the ex-dividend date set for 2024-01-02. 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 Park Aerospace Corp's dividend performance and assess its sustainability.
What Does Park Aerospace Corp Do?
Park Aerospace Corp designs, develops, and manufactures advanced composite materials, structures, and assemblies for the aerospace markets, including low-volume and prototype tooling. Its primary business segment is Aerospace, with the majority of its revenue stemming from North America, though it also operates in Asia and Europe. Park Aerospace Corp offers products such as Advanced Composite Prepregs for Aircraft Structures and Interiors, Sigma Strut, and Alpha Strut.
A Glimpse at Park Aerospace Corp's Dividend History
Park Aerospace Corp has maintained a consistent dividend payment record since 1985, distributing dividends on a quarterly basis. It has increased its dividend each year since 1998, earning the status of a dividend aristocrat—a title awarded to companies with at least 26 consecutive years of dividend increases. Below is a chart showing annual Dividends Per Share to track historical trends.
Breaking Down Park Aerospace Corp's Dividend Yield and Growth
As of today, Park Aerospace Corp currently has a 12-month trailing dividend yield of 3.23% and a 12-month forward dividend yield of 3.40%, indicating an expected increase in dividend payments over the next year. The 5-year yield on cost for Park Aerospace Corp stock is approximately 3.24%.
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 2023-08-31, Park Aerospace Corp's dividend payout ratio is 0.88, which may suggest a potential concern for dividend sustainability. Conversely, Park Aerospace Corp's profitability rank is 8 out of 10 as of 2023-08-31, indicating good profitability prospects and a history of net profit in 9 out of the past 10 years.
Growth Metrics: The Future Outlook
For dividend sustainability, robust growth metrics are crucial. Park Aerospace Corp's growth rank of 8 out of 10 suggests a positive growth trajectory relative to competitors. However, the company's revenue has seen an average annual decrease of -3.30%, underperforming approximately 67.68% of global competitors. The 3-year EPS growth rate has increased by an average of 1.30% per year, yet this underperforms about 55% of global competitors. Additionally, the 5-year EBITDA growth rate of -8.70% underperforms 80.31% of global competitors.
Next Steps
In conclusion, while Park Aerospace Corp has a strong history of dividend payments and is recognized as a dividend aristocrat, the current payout ratio and mixed growth metrics present a nuanced picture. The robust profitability rank provides some reassurance, yet the underperformance in revenue and EBITDA growth rates warrant careful consideration for the future. Investors should weigh these factors when assessing the long-term sustainability of Park Aerospace Corp's dividends. For those seeking high-dividend yield stocks, the High Dividend Yield Screener on GuruFocus Premium can be a valuable tool.
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.
