Exploring the Sustainability and Growth of RELX PLC's Dividends
RELX PLC (RELX, Financial) recently announced a dividend of $0.53 per share, payable on 2024-06-18, with the ex-dividend date set for 2024-05-02. 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 RELX PLC's dividend performance and assess its sustainability.
What Does RELX PLC Do?
RELX PLC (RELX, Financial) is a global provider of information-based analytics and decision tools for professional and business customers in various industries. The company serves sectors such as science and medical research, risk management, and legal. In addition, RELX organizes large-scale digital and face-to-face events such as industry trade shows. Around 60% of revenue is generated in North America and about 20% in Europe.
A Glimpse at RELX PLC's Dividend History
RELX PLC has maintained a consistent dividend payment record since 1990. Dividends are currently distributed on a bi-annually basis. RELX PLC has increased its dividend each year since 2010. 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 14 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down RELX PLC's Dividend Yield and Growth
As of today, RELX PLC currently has a 12-month trailing dividend yield of 1.68% and a 12-month forward dividend yield of 1.79%, suggesting an expectation of increased dividend payments over the next 12 months. RELX PLC's dividend yield of 1.68% is near a 10-year low and underperforms 73.85% of global competitors in the Business Services industry, suggesting that the company's dividend yield may not be a compelling proposition for income investors.
Over the past three years, RELX PLC's annual dividend growth rate was 6.90%. Extended to a five-year horizon, this rate decreased to 6.50% per year. And over the past decade, RELX PLC's annual dividends per share growth rate stands at 9.30%.
Based on RELX PLC's dividend yield and five-year growth rate, the 5-year yield on cost of RELX PLC stock as of today is approximately 2.30%.
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, RELX PLC's dividend payout ratio is 0.56.
RELX PLC's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks RELX PLC's profitability 9 out of 10 as of 2023-12-31, 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. RELX 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 RELX PLC's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. RELX PLC's revenue has increased by approximately 9.50% per year on average, a rate that outperforms approximately 56.37% 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, RELX PLC's earnings increased by approximately 18.90% per year on average, a rate that outperforms approximately 57.87% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 6.20%, which outperforms approximately 39.89% of global competitors.
Next Steps
Considering RELX PLC's consistent dividend payments, robust dividend growth rate, prudent payout ratio, and strong profitability and growth metrics, the company appears well-positioned to continue rewarding shareholders with stable dividends. Investors seeking to expand their portfolio with reliable dividend-paying stocks may find RELX PLC an attractive option. For more detailed analysis and stock screening, GuruFocus Premium users can utilize 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.
