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Avnet Inc's Dividend Analysis

Exploring the Sustainability and Growth of Avnet Inc's Dividends

Avnet Inc (NASDAQ:AVT) recently announced a dividend of $0.31 per share, payable on 2024-06-19, with the ex-dividend date set for 2024-06-05. 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 Avnet Inc's dividend performance and assess its sustainability.

What Does Avnet Inc Do?

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Avnet Inc is a global distributor of electronic components, connecting suppliers of semiconductors and other components to a base of 2.1 million small- and mid-sized customers in 140 countries. Avnet is the third largest semiconductor distributor in the world, and the largest for European chip distribution. Avnet services all levels of electronics design and development, servicing engineers with design tools, test kits, and services alongside its high-volume distribution for final designs.

Avnet Inc's Dividend Analysis
Avnet Inc's Dividend Analysis

A Glimpse at Avnet Inc's Dividend History

Avnet Inc has maintained a consistent dividend payment record since 2013. Dividends are currently distributed on a quarterly basis.

Avnet Inc has increased its dividend each year since 2014. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 10 years.

Avnet Inc's Dividend Analysis
Avnet Inc's Dividend Analysis

Breaking Down Avnet Inc's Dividend Yield and Growth

As of today, Avnet Inc currently has a 12-month trailing dividend yield of 2.24% and a 12-month forward dividend yield of 2.28%. This suggests an expectation of increased dividend payments over the next 12 months.

Over the past three years, Avnet Inc's annual dividend growth rate was 11.40%. Extended to a five-year horizon, this rate decreased to 8.70% per year.

Avnet Inc's Dividend Analysis
Avnet Inc'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, Avnet Inc's dividend payout ratio is 0.20.

Avnet Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Avnet Inc's profitability 7 out of 10 as of 2024-03-31, suggesting good profitability prospects. The company has reported net profit in 8 years out of past 10 years.

Growth Metrics: The Future Outlook

To ensure the sustainability of dividends, a company must have robust growth metrics. Avnet Inc'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 Avnet Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Avnet Inc's revenue has increased by approximately 17.40% per year on average, a rate that outperforms than approximately 83.82% 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, Avnet Inc's earnings increased by approximately 83.20% per year on average, a rate that outperforms than approximately 94.66% of global competitors.

Lastly, the company's 5-year EBITDA growth rate of 52.10%, which outperforms than approximately 95.49% of global competitors.

Conclusion

With a solid track record of dividend payments, a healthy payout ratio, and robust growth metrics, Avnet Inc appears well-positioned to maintain its dividend growth trajectory. The company's strategic position in the semiconductor distribution market, combined with its financial health and growth prospects, makes it a compelling consideration for dividend-seeking investors. 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.