Associated British Foods PLC's Dividend Analysis
Exploring the Dividend Performance and Sustainability of Associated British Foods PLC
Associated British Foods PLC (ASBFY) recently announced a dividend of $0.26 per share, payable on 2024-07-19, with the ex-dividend date set for 2024-05-31. 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 Associated British Foods PLC's dividend performance and assess its sustainability.
What Does Associated British Foods PLC Do?
This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
How to calculate the intrinsic value of a stock?
Associated British Foods is a diversified international retail, food, and ingredients group with 130,000 employees and operations in 50 countries across Europe, southern Africa, the Americas, Asia, and Australia. The group sells branded grocery products, grows and processes sugar, supplies farmers with crop input and animal feed, and runs the popular Primark clothing retail chain. It also supplies ingredients like baker's yeast, enzymes, lipids, and cereal specialties. Some 40% of sales are in the UK. Primark generates more than half of the firm's operating profit.
A Glimpse at Associated British Foods PLC's Dividend History
Associated British Foods PLC has maintained a consistent dividend payment record since 2021. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Associated British Foods PLC's Dividend Yield and Growth
As of today, Associated British Foods PLC currently has a 12-month trailing dividend yield of 2.29% and a 12-month forward dividend yield of 2.52%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Associated British Foods PLC's annual dividend growth rate was 8.70%. Extended to a five-year horizon, this rate decreased to -6.20% per year. And over the past decade, Associated British Foods PLC's annual dividends per share growth rate stands at -2.60%.
Based on Associated British Foods PLC's dividend yield and five-year growth rate, the 5-year yield on cost of Associated British Foods PLC stock as of today is approximately 1.66%.
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 2024-02-29, Associated British Foods PLC's dividend payout ratio is 0.37.
Associated British Foods PLC's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Associated British Foods PLC's profitability 8 out of 10 as of 2024-02-29, 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. Associated British Foods PLC'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 Associated British Foods PLC's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Associated British Foods PLC's revenue has increased by approximately 12.90% per year on average, a rate that outperforms approximately 68.31% 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, Associated British Foods PLC's earnings increased by approximately 27.80% per year on average, a rate that outperforms approximately 72.61% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -0.10%, which outperforms approximately 37.21% of global competitors.
Conclusion
Considering Associated British Foods PLC's dividend payments, growth rate, payout ratio, profitability, and growth metrics, the company presents a compelling case for value investors seeking stable dividend income with potential for growth. For those looking to explore 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.