An In-Depth Look at Auto Trader Group PLC's Upcoming Dividend Payment and Financial Health
Auto Trader Group PLC (ATDRY, Financial) recently announced a dividend of $0.01 per share, payable on 2024-02-09, 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 Auto Trader Group PLC's dividend performance and assess its sustainability.
What Does Auto Trader Group PLC Do?
Auto Trader Group PLC is a digital automotive marketplace based in the UK and Ireland, which provides trading channels for a range of vehicles such as cars, trucks, vans, bikes, and farm machinery, as well as relevant services such as car insurance, loans, valuations, and vehicle check services. The company generates revenue from three streams. It derives trade revenue from retailers and home traders advertising vehicles and using Auto Trader's products, which represent the majority of the group income. Consumer services revenue stems from private sellers placing advertisements and from the company's partners who provide services to consumers. Display advertising revenue is earned from manufacturers or their advertising agencies, which advertise their brand or services on the marketplace.
A Glimpse at Auto Trader Group PLC's Dividend History
Auto Trader Group PLC has maintained a consistent dividend payment record since 2016. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Auto Trader Group PLC's Dividend Yield and Growth
As of today, Auto Trader Group PLC currently has a 12-month trailing dividend yield of 1.18% and a 12-month forward dividend yield of 1.23%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Auto Trader Group PLC's annual dividend growth rate was 5.80%. Based on Auto Trader Group PLC's dividend yield and five-year growth rate, the 5-year yield on cost of Auto Trader Group PLC stock as of today is approximately 1.18%.
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, Auto Trader Group PLC's dividend payout ratio is 0.33. Auto Trader Group PLC's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Auto Trader Group 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 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. Auto Trader Group 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 Auto Trader Group PLC's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Auto Trader Group PLC's revenue has increased by approximately 10.10% per year on average, a rate that outperforms approximately 53.47% 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, Auto Trader Group PLC's earnings increased by approximately 1.60% per year on average, a rate that outperforms approximately 41.86% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 4.50%, which outperforms approximately 29.91% of global competitors.
Concluding Thoughts on Auto Trader Group PLC's Dividend Profile
In conclusion, Auto Trader Group PLC's upcoming dividend payment, along with its history of consistent dividend growth, presents an appealing aspect for income-focused investors. The company's moderate payout ratio paired with high profitability and growth metrics indicate a sustainable dividend policy moving forward. With a solid track record of revenue and earnings growth, Auto Trader Group PLC appears well-positioned to continue rewarding shareholders with dividends. As investors consider the potential of Auto Trader Group PLC as part of their portfolios, they may also explore other high-dividend yield opportunities using tools like the GuruFocus 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.
