Exploring the Sustainability and Growth of Universal Music Group NV's Dividends
Universal Music Group NV (UNVGY, Financial) recently announced a dividend of $0.14 per share, payable on 2024-06-27, with the ex-dividend date set for 2024-05-20. 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 Universal Music Group NV's dividend performance and assess its sustainability.
What Does Universal Music Group NV Do?
Universal Music Group is the largest of the three major global record labels, with Sony Music and Warner Music following. Universal's most significant segment, recorded music, includes iconic labels like Interscope, Capitol Music, Decca, EMI, and Motown, featuring popular artists such as Drake, Taylor Swift, J Balvin, and Luke Bryan. Universal Music Publishing Group, the second-largest music publisher globally, owns and administers nearly 4 million compositions. Universal Music was spun out of Vivendi in September 2021, with 60% distributed to Vivendi shareholders, 20% to Tencent, 10% to Pershing Square Capital, and 10% remaining at Vivendi.
A Glimpse at Universal Music Group NV's Dividend History
Universal Music Group NV has maintained a consistent dividend payment record since 2022, distributing dividends bi-annually. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Universal Music Group NV's Dividend Yield and Growth
As of today, Universal Music Group NV's 12-month trailing dividend yield and forward dividend yield both stand at 1.73%, indicating an expectation of consistent dividend payments over the next 12 months. Additionally, the 5-year yield on cost of Universal Music Group NV stock is approximately 1.73%.
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. As of 2023-12-31, Universal Music Group NV's dividend payout ratio is 1.00, which may suggest concerns about dividend sustainability. However, Universal Music Group NV's profitability rank of 7 out of 10 indicates good profitability prospects, with the company reporting net profit in 6 of the past 10 years.
Growth Metrics: The Future Outlook
Universal Music Group NV's growth rank of 7 out of 10 suggests a good growth trajectory relative to competitors. The company's strong revenue model is evidenced by a revenue per share and a 3-year revenue growth rate of approximately 13.70% per year, outperforming about 73.03% of global competitors. Additionally, the 3-year EPS growth rate of about 15.10% per year and a 5-year EBITDA growth rate of 18.80% further underscore its capability to sustain dividends in the long run.
Conclusion: Evaluating Dividend Sustainability and Growth
While the payout ratio may raise some concerns about the sustainability of Universal Music Group NV's dividends, the company's robust profitability, revenue growth, and earnings growth provide a strong foundation for future dividend payments. Investors should continue to monitor these metrics to ensure ongoing dividend reliability.
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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.
