Unveiling the Dividend Dynamics of Ferguson PLC
Ferguson PLC (FERG, Financial) recently announced a dividend of $0.79 per share, payable on 2024-05-07, with the ex-dividend date set for 2024-03-14. 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 delve into Ferguson PLC's dividend performance and evaluate its sustainability.
What Does Ferguson PLC Do?
Ferguson is a powerhouse in the distribution of plumbing and HVAC products, catering to a vast array of markets, including repair, maintenance, and improvement, as well as new construction and civil infrastructure. Boasting a customer base of over 1 million, Ferguson's extensive network is bolstered by its sourcing from 37,000 suppliers. The company's engagement strategies span across 1,700 North American branches, robust phone and online services, and residential showrooms. In the fiscal year 2023, Ferguson generated a staggering 95% of its nearly $30 billion in sales from the U.S. market. After divesting its U.K. business in 2021, Ferguson has sharpened its focus on dominating the North American industrial and construction distribution sector.
A Glimpse at Ferguson PLC's Dividend History
Ferguson PLC has a solid track record of consistent dividend payments dating back to 2011, with dividends currently being distributed on a quarterly basis. For investors interested in Ferguson PLC's dividend trends, the chart below provides a visual representation of the annual Dividends Per Share over the years.
Breaking Down Ferguson PLC's Dividend Yield and Growth
Ferguson PLC currently sports a 12-month trailing dividend yield of 1.48% and a 12-month forward dividend yield of 1.54%. This forward-looking perspective hints at an anticipated increase in dividend payments over the next year.
Over the last three years, Ferguson PLC's annual dividend growth rate was a robust 42.10%. Extending this to a five-year period, the growth rate moderates to 19.00% per annum. Looking at the past decade, the annual dividends per share growth rate has been an impressive 11.80%.
Considering Ferguson PLC's dividend yield and five-year growth rate, the 5-year yield on cost of Ferguson PLC stock stands at approximately 3.53%.
The Sustainability Question: Payout Ratio and Profitability
The dividend payout ratio is a critical metric for assessing dividend sustainability, indicating the proportion of earnings allocated to dividends. With a payout ratio of 0.32 as of 2024-01-31, Ferguson PLC demonstrates a balanced approach, retaining sufficient earnings for growth and contingencies.
Ferguson PLC's profitability rank of 8 out of 10 underscores its strong earnings capacity compared to peers. A decade of consistent positive net income further cements its financial robustness.
Growth Metrics: The Future Outlook
Ferguson PLC's impressive growth rank of 8 suggests a promising growth trajectory. Its revenue per share and 3-year revenue growth rate of 13.90% per year outperform approximately 69.72% of global competitors.
Ferguson PLC's 3-year EPS growth rate of 25.00% per year surpasses approximately 57.63% of global competitors, indicating strong earnings growth. Moreover, its 5-year EBITDA growth rate of 22.90% outperforms roughly 73.26% of its global peers.
Next Steps
Considering Ferguson PLC's consistent dividend payments, robust growth rate, prudent payout ratio, and solid profitability and growth metrics, the company presents an attractive profile for value investors focused on dividend income. With the promise of continued performance and strategic focus, Ferguson PLC stands as a noteworthy consideration for portfolios aiming for stable income and growth.
For those seeking to expand their investment horizons, GuruFocus Premium offers a High Dividend Yield Screener to identify high-yield dividend stocks with promising financial metrics.
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.
