Exploring the Sustainability and Growth of Dividends
China Tower Corp Ltd (CHWRF, Financial) recently announced a dividend of $0.04 per share, payable on 2024-06-28, with the ex-dividend date set for 2024-05-23. 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 China Tower Corp Ltd's dividend performance and assess its sustainability.
What Does China Tower Corp Ltd Do?
China Tower Corp Ltd is a telecommunications tower infrastructure service provider. The Company is principally engaged in the construction, maintenance, and operation of base station ancillary facilities such as telecommunications towers, public network coverage in high-speed railways and subways, and large-scale indoor Distributed Antenna Systems (DAS). The business of the company includes Tower business; DAS business; Smart Tower business and Energy business. It generates maximum revenue from the Tower business.
A Glimpse at China Tower Corp Ltd's Dividend History
China Tower Corp Ltd has maintained a consistent dividend payment record since 2021. Dividends are currently distributed on a yearly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down China Tower Corp Ltd's Dividend Yield and Growth
As of today, China Tower Corp Ltd currently has a 12-month trailing dividend yield of 3.74% and a 12-month forward dividend yield of 4.21%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, China Tower Corp Ltd's annual dividend growth rate was 28.40%. Based on China Tower Corp Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of China Tower Corp Ltd stock as of today is approximately 3.74%.
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 2024-03-31, China Tower Corp Ltd's dividend payout ratio is 0.50. China Tower Corp Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks China Tower Corp Ltd's profitability 6 out of 10 as of 2024-03-31, suggesting fair profitability. The company has reported net profit in 8 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. China Tower Corp Ltd's growth rank of 6 out of 10 suggests that the company has a fair growth outlook. Revenue is the lifeblood of any company, and China Tower Corp Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. China Tower Corp Ltd's revenue has increased by approximately 2.30% per year on average, a rate that underperforms than approximately 60.11% 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, China Tower Corp Ltd's earnings increased by approximately 9.90% per year on average, a rate that underperforms than approximately 44.82% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 20.80%, which underperforms than approximately 23.56% of global competitors.
Next Steps
Considering China Tower Corp Ltd's consistent dividend payments, notable dividend growth rate, manageable payout ratio, and fair profitability and growth metrics, the company presents a potentially viable option for value investors focused on dividend income. However, as always, it's essential to consider the broader economic and sector-specific trends when making investment decisions. 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.
