Exploring the Sustainability and Growth of Stadler Rail AG's Dividend Payments
Stadler Rail AG (SRAIF, Financial) recently announced a dividend of $0.9 per share, payable on 2024-05-28, with the ex-dividend date set for 2024-05-24. 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 Stadler Rail AG's dividend performance and assess its sustainability.
What Does Stadler Rail AG Do?
Stadler Rail AG is a Switzerland-based producer of rolling stock and related systems. The company operates in three reportable segments: the Rolling Stock segment, which includes the manufacturing of various types of rail vehicles; the Service & Components segment, which offers full service, modernization and revision, spare parts service, and vehicle repairs, including the maintenance and assessment of defects; and the Signalling segment, which develops and distributes various signalling solutions for vehicles and infrastructures. Geographically, the company operates in Germany, Austria, Switzerland, Western Europe, Eastern Europe, America, CIS, and the rest of the world.
A Glimpse at Stadler Rail AG's Dividend History
Stadler Rail AG has maintained a consistent dividend payment record since 2022. Dividends are currently distributed on a yearly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Stadler Rail AG's Dividend Yield and Growth
As of today, Stadler Rail AG currently has a 12-month trailing dividend yield of 3.55% and a 12-month forward dividend yield of 3.66%. This suggests an expectation of increased dividend payments over the next 12 months. Stadler Rail AG's dividend yield of 3.55% is near a 10-year high and outperforms 54.33% of global competitors in the Transportation industry, suggesting that the company's dividend yield stands out as an attractive proposition for income investors.
Over the past three years, Stadler Rail AG's annual dividend growth rate was -9.10%. Based on Stadler Rail AG's dividend yield and five-year growth rate, the 5-year yield on cost of Stadler Rail AG stock as of today is approximately 3.55%.
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, Stadler Rail AG's dividend payout ratio is 0.70, which may suggest that the company's dividend may not be sustainable. Stadler Rail AG's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Stadler Rail AG's profitability 7 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported net profit in 8 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. Stadler Rail AG's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Revenue is the lifeblood of any company, and Stadler Rail AG's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Stadler Rail AG's revenue has increased by approximately 5.40% per year on average, a rate that underperforms approximately 59.63% 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, Stadler Rail AG's earnings increased by approximately -1.30% per year on average, a rate that underperforms approximately 70.03% of global competitors. Lastly, the company's 5-year EBITDA growth rate of -7.00%, which underperforms approximately 82.46% of global competitors.
Concluding Insights
Stadler Rail AG's recent dividend announcement, along with its historical performance and financial metrics, presents a mixed picture of sustainability. While the company maintains a strong profitability rank, its negative growth rates in dividends and earnings may raise concerns about the long-term viability of its dividend payments. Investors should weigh these factors carefully against their investment strategy and risk tolerance. For those interested in exploring further, 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.
