Exploring the Sustainability of Globe Telecom Inc's Dividends
Globe Telecom Inc (GTMEY, Financial) recently announced a dividend of $0.43 per share, payable on 2024-06-28, with the ex-dividend date set for 2024-05-28. 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 Globe Telecom Inc's dividend performance and assess its sustainability.
What Does Globe Telecom Inc Do?
Globe Telecom Inc is a telecommunications company that provides mobile, voice, and broadband services. Its operating segments are Mobile Business, Fixed Line, and Broadband Business. Mobile involves traditional mobile services and contributes the majority of company revenue. Within the mobile division, the majority of subscribers are considered prepaid customers. The other division, fixed-line and broadband, provides fixed-line voice services, corporate data, and Internet for its customers. The company generates the vast majority of its revenue in the Philippines.
A Glimpse at Globe Telecom Inc's Dividend History
Globe Telecom Inc has maintained a consistent dividend payment record since 2011. Dividends are currently distributed on a quarterly basis.
Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Globe Telecom Inc's Dividend Yield and Growth
As of today, Globe Telecom Inc currently has a 12-month trailing dividend yield of 5.42% and a 12-month forward dividend yield of 5.39%. This suggests an expectation of a slight decrease in dividend payments over the next 12 months.
Over the past three years, Globe Telecom Inc's annual dividend growth rate was -2.00%. Extended to a five-year horizon, this rate increased to 3.00% per year. And over the past decade, Globe Telecom Inc's annual dividends per share growth rate stands at 4.40%.
Based on Globe Telecom Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Globe Telecom Inc stock as of today is approximately 6.28%.
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, Globe Telecom Inc's dividend payout ratio is 0.76, which may suggest that the company's dividend may not be sustainable.
Globe Telecom Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Globe Telecom Inc'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. Globe Telecom Inc's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Globe Telecom Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Globe Telecom Inc's revenue has increased by approximately 1.30% per year on average, a rate that underperforms than approximately 65.21% 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, Globe Telecom Inc's earnings increased by approximately -6.60% per year on average, a rate that underperforms than approximately 74.25% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -2.60%, which underperforms than approximately 73.79% of global competitors.
Next Steps
Given the analysis of Globe Telecom Inc's dividend payments, dividend growth rate, payout ratio, profitability, and growth metrics, investors should weigh these factors carefully. While the company shows strong profitability and a decent yield, the negative trends in growth rates and the high payout ratio may raise concerns about the long-term sustainability of its dividends. As always, it's crucial for investors to consider their own financial goals and risk tolerance 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.
