Assessing the Sustainability of Experian PLC's Upcoming Dividend
Experian PLC (EXPGY, Financial) recently announced a dividend of $0.18 per share, payable on 2024-02-02, with the ex-dividend date set for 2024-01-04. 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 Experian PLC's dividend performance and assess its sustainability.
What Does Experian PLC Do?
Experian is one of the leading credit bureaus in North America and the United Kingdom, providing the consumer information that is the basis for granting credit. The company also provides decision analytics, marketing data, and direct-to-consumer credit products and services. About one quarter of the company's revenue is generated outside North America and the United Kingdom, primarily in Latin America and Asia.
A Glimpse at Experian PLC's Dividend History
Experian PLC has maintained a consistent dividend payment record since 2007. Dividends are currently distributed on a bi-annually basis.
Experian PLC 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 11 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Experian PLC's Dividend Yield and Growth
As of today, Experian PLC currently has a 12-month trailing dividend yield of 1.37% and a 12-month forward dividend yield of 1.41%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Experian PLC's annual dividend growth rate was 4.30%. Extended to a five-year horizon, this rate increased to 5.80% per year. And over the past decade, Experian PLC's annual dividends per share growth rate stands at 6.70%.
Based on Experian PLC's dividend yield and five-year growth rate, the 5-year yield on cost of Experian PLC stock as of today is approximately 1.82%.
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, Experian PLC's dividend payout ratio is 0.49.
Experian PLC's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Experian PLC's profitability 9 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported positive net income for each of 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. Experian PLC's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Experian PLC's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Experian PLC's revenue has increased by approximately 8.80% per year on average, a rate that outperforms approximately 61.85% 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, Experian PLC's earnings increased by approximately 10.20% per year on average, a rate that outperforms approximately 48.75% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 9.40%, which outperforms approximately 53.39% of global competitors.
Next Steps
In conclusion, Experian PLC's upcoming dividend, consistent dividend growth, prudent payout ratio, strong profitability, and robust growth metrics paint a promising picture for value investors. These factors collectively suggest that Experian PLC is not only committed to returning value to shareholders but is also positioned to sustain and potentially increase its dividend payments in the future. As investors consider adding Experian PLC to their portfolios, they may find reassurance in the company's financial health and its potential for long-term growth. Will Experian PLC continue its trajectory of dividend growth, and what might this signal for the company's future performance?
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
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.
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