Delving into the Dividend Dynamics of Games Workshop Group PLC
Games Workshop Group PLC (GMWKF, Financial) recently announced a dividend of $1.2 per share, payable on 2024-02-23, with the ex-dividend date set for 2024-01-18. 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 Games Workshop Group PLC's dividend performance and assess its sustainability.
What Does Games Workshop Group PLC Do?
Games Workshop Group PLC designs, manufactures, and sells fantasy miniatures and games-related products. It carries out manufacturing activities in the UK and sells these products in various regions including Continental Europe, North America, and Asia Pacific. The company operates through two segments: Core and Licensing. The Core segment encompasses revenue and expenditure relating to the design, manufacture, and sales of their fantasy miniatures and related products. The Licensing segment includes all revenue and expenditure related to licenses granted to external partners. The company generates the majority of its revenue from the Core segment, offering more than 1,000 products through independent retail outlets in over 50 countries.
A Glimpse at Games Workshop Group PLC's Dividend History
Games Workshop Group PLC has maintained a consistent dividend payment record since 2014, with dividends currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Games Workshop Group PLC's Dividend Yield and Growth
As of today, Games Workshop Group PLC currently has a 12-month trailing dividend yield of 4.48% and a 12-month forward dividend yield of 4.46%. This suggests an expectation of a slight decrease in dividend payments over the next 12 months. Over the past three years, Games Workshop Group PLC's annual dividend growth rate was an impressive 42.00%. However, extended to a five-year horizon, this rate decreased to 25.50% per year. Based on Games Workshop Group PLC's dividend yield and five-year growth rate, the 5-year yield on cost of Games Workshop Group PLC stock as of today is approximately 13.95%.
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 2023-11-30, Games Workshop Group PLC's dividend payout ratio is 1.05, which may suggest that the company's dividend may not be sustainable. Games Workshop Group PLC's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Games Workshop Group PLC's profitability 10 out of 10 as of 2023-11-30, 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. Games Workshop Group PLC's growth rank of 10 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Revenue is the lifeblood of any company, and Games Workshop Group PLC's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Games Workshop Group PLC's revenue has increased by approximately 20.20% per year on average, outperforming approximately 88.6% 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, Games Workshop Group PLC's earnings increased by approximately 23.40% per year on average, outperforming approximately 63.77% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 20.70% outperforms approximately 70.54% of global competitors.
Next Steps
In conclusion, Games Workshop Group PLC's dividend payments, supported by a strong dividend growth rate, present an appealing aspect for income-focused investors. However, the slightly elevated payout ratio may raise concerns about the long-term sustainability of such dividend payments. Nevertheless, the company's robust profitability and impressive growth metrics provide a counterbalance, suggesting that Games Workshop Group PLC is well-positioned to maintain its dividend policy while continuing to invest in future growth. For investors seeking high-dividend yield stocks, Games Workshop Group PLC warrants consideration, but with a watchful eye on future earnings and payout ratios. 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.
