Exploring the Sustainability of Brunswick Corp's Dividend Payments
Brunswick Corp (BC, Financial) recently announced a dividend of $0.42 per share, payable on 2024-03-15, with the ex-dividend date set for 2024-02-23. 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 Brunswick Corp's dividend performance and assess its sustainability.
What Does Brunswick Corp Do?
Brunswick is a leading manufacturer in the marine recreation industry. The firm has more than 60 brands delivering products across propulsion (outboard, sterndrive, and inboard engines, propulsion-related controls, rigging, and propellers), parts, accessories, and technology, and boats (including well-known brands like Boston Whaler and Sea Ray). It also owns numerous Freedom Boat Club (shared ownership) locations as well as Boateka, which facilitates transactions in the used boat market. Brunswick's focus surrounds building the innovative marine and recreational experiences, technologies, and connections supported by quality and innovation.
A Glimpse at Brunswick Corp's Dividend History
Brunswick Corp has maintained a consistent dividend payment record since 1986. Dividends are currently distributed on a quarterly basis. Brunswick Corp has increased its dividend each year since 2008. 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 16 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Brunswick Corp's Dividend Yield and Growth
As of today, Brunswick Corp currently has a 12-month trailing dividend yield of 1.79% and a 12-month forward dividend yield of 1.88%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Brunswick Corp's annual dividend growth rate was 17.40%. Extended to a five-year horizon, this rate decreased to 16.70% per year. And over the past decade, Brunswick Corp's annual dividends per share growth rate stands at an impressive 22.60%. Based on Brunswick Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Brunswick Corp stock as of today is approximately 3.87%.
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 2023-12-31, Brunswick Corp's dividend payout ratio is 0.18.
Brunswick Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Brunswick Corp's profitability 8 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported net profit in 9 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Brunswick Corp's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Brunswick Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Brunswick Corp's revenue has increased by approximately 18.50% per year on average, a rate that outperforms approximately 81% 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, Brunswick Corp's earnings increased by approximately 20.20% per year on average, a rate that outperforms approximately 62.79% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 21.40%, which outperforms approximately 82.23% of global competitors.
Next Steps
In conclusion, Brunswick Corp's dividend payments, underscored by a strong dividend growth rate, a prudent payout ratio, robust profitability, and compelling growth metrics, present a promising investment opportunity for value investors. The company's commitment to increasing dividends and maintaining financial health suggests that it values returning capital to shareholders while also investing in future growth. Investors considering Brunswick Corp should weigh these factors as they assess the stock's potential for long-term income and capital appreciation. 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.
