Exploring the Sustainability and Growth of Linamar Corp's Dividends
Linamar Corp (LIMAF, Financial) recently announced a dividend of $0.25 per share, payable on 2024-06-07, 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 Linamar Corps dividend performance and assess its sustainability.
What Does Linamar Corp Do?
Linamar Corp is a diversified global manufacturing company of highly engineered products. The Company's Industrial segment operates the Skyjack and MacDon brands, manufacturing products for the Aerial Work Platform and Agricultural industries, respectively. The Mobility segment features vertically integrated operations to combine expertise in light metal casting, forging, machining and assembly of components and systems for electric and traditional vehicle applications. In addition, McLaren Engineering and eLIN Product Solutions Group provide design, development, and testing services for the Mobility segment.
A Glimpse at Linamar Corp's Dividend History
Linamar Corp has maintained a consistent dividend payment record since 2003, distributing dividends on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Linamar Corp's Dividend Yield and Growth
As of today, Linamar Corp currently has a 12-month trailing dividend yield of 1.29% and a 12-month forward dividend yield of 1.40%, suggesting an expected increase in dividend payments over the next 12 months. Over the past three years, Linamar Corp's annual dividend growth rate was 34.70%, which decreased to 16.00% per year over a five-year horizon. Over the past decade, the annual dividends per share growth rate stands at 8.70%. Based on Linamar Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Linamar Corp stock as of today is approximately 2.71%.
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 2024-03-31, Linamar Corp's dividend payout ratio is 0.10. Linamar Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Linamar Corp's profitability 8 out of 10 as of 2024-03-31, suggesting good profitability prospects. The company has reported positive net income for each of 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. Linamar Corp's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Linamar Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Linamar Corp's revenue has increased by approximately 21.10% per year on average, a rate that outperforms approximately 80.44% 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, Linamar Corp's earnings increased by approximately 20.50% per year on average, a rate that outperforms approximately 56.44% of global competitors. Lastly, the company's 5-year EBITDA growth rate of -0.90%, which outperforms approximately 31.22% of global competitors.
Conclusion: Evaluating Linamar Corp's Dividend Future
Considering Linamar Corp's consistent dividend payments, robust growth in dividends, low payout ratio, strong profitability, and favorable growth metrics, the company stands as a potentially reliable dividend payer in the foreseeable future. Investors seeking stable and growing dividends might find Linamar Corp an attractive option. For further exploration of dividend opportunities, 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.
