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Alibaba Group Holding Ltd's Dividend Analysis

An In-Depth Look at Alibaba Group Holding Ltd's Upcoming Dividend and Its Historical Performance

Alibaba Group Holding Ltd (NYSE:BABA) recently announced a dividend of $0.66 per share, payable on 2024-07-12, with the ex-dividend date set for 2024-06-13. 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 Alibaba Group Holding Ltd's dividend performance and assess its sustainability.

What Does Alibaba Group Holding Ltd Do?

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Alibaba is the world's largest online and mobile commerce company as measured by gross merchandise volume. It operates China's online marketplaces, including Taobao (consumer-to-consumer) and Tmall (business-to-consumer). The China commerce retail division is the most valuable cash flow-generating business at Alibaba. Additional revenue sources include China commerce wholesale, international commerce retail/wholesale, local consumer services, cloud computing, digital media and entertainment platforms, Cainiao logistics services, and innovation initiatives/other.

Alibaba Group Holding Ltd's Dividend Analysis
Alibaba Group Holding Ltd's Dividend Analysis

A Glimpse at Alibaba Group Holding Ltd's Dividend History

Alibaba Group Holding Ltd has maintained a consistent dividend payment record since 2023. Dividends are currently distributed on a yearly basis. Alibaba Group Holding Ltd has increased its dividend each year since -. The stock is thus listed as a dividend king, an honor that is given to companies that have increased their dividend each year for at least the past 2024 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.

Alibaba Group Holding Ltd's Dividend Analysis
Alibaba Group Holding Ltd's Dividend Analysis

Breaking Down Alibaba Group Holding Ltd's Dividend Yield and Growth

As of today, Alibaba Group Holding Ltd currently has a 12-month trailing dividend yield of 1.27% and a 12-month forward dividend yield of 2.57%. This suggests an expectation of increased dividend payments over the next 12 months. Based on Alibaba Group Holding Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Alibaba Group Holding Ltd stock as of today is approximately 1.27%.

Alibaba Group Holding Ltd's Dividend Analysis
Alibaba Group Holding Ltd's Dividend Analysis

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, Alibaba Group Holding Ltd's dividend payout ratio is 0.12. Alibaba Group Holding Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Alibaba Group Holding Ltd's profitability 9 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. Alibaba Group Holding Ltd's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Revenue is the lifeblood of any company, and Alibaba Group Holding Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Alibaba Group Holding Ltd's revenue has increased by approximately 8.60% per year on average, a rate that outperforms approximately 57.66% 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, Alibaba Group Holding Ltd's earnings increased by approximately -4.80% per year on average, a rate that outperforms approximately 31.89% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 6.00%, which outperforms approximately 42.55% of global competitors.

Conclusion

Alibaba Group Holding Ltd's consistent dividend payments, along with its robust profitability and growth metrics, paint a promising picture for current and potential investors. The company's strategic initiatives and strong market presence suggest a sustained ability to generate shareholder value through dividends. 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.

This article first appeared on GuruFocus.