Yahoo Finance Cognizant Technology Solutions Corp's Dividend Analysis
Exploring the Sustainability and Growth of Cognizant's Dividends
Cognizant Technology Solutions Corp (NASDAQ:CTSH) recently announced a dividend of $0.3 per share, payable on 2024-05-29, with the ex-dividend date set for 2024-05-17. 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 delve into Cognizant Technology Solutions Corp's dividend performance and assess its sustainability.
What Does Cognizant Technology Solutions Corp Do?
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Cognizant is a global IT services provider, offering consulting and outsourcing services to some of the world's largest enterprises across various industries including financial services, media and communications, healthcare, natural resources, and consumer products. Employing nearly 300,000 people globally, with about 70% based in India, Cognizant's headquarters are located in Teaneck, New Jersey.
A Glimpse at Cognizant Technology Solutions Corp's Dividend History
Cognizant Technology Solutions Corp has maintained a consistent dividend payment record since 2017, distributing dividends on a quarterly basis.
Breaking Down Cognizant Technology Solutions Corp's Dividend Yield and Growth
As of today, Cognizant Technology Solutions Corp currently has a 12-month trailing dividend yield of 1.65% and a 12-month forward dividend yield of 1.69%, indicating an expected increase in dividend payments over the next 12 months.
Over the past three years, Cognizant's annual dividend growth rate was 9.60%. Extending to a five-year horizon, this rate decreased to 8.50% per year. Based on Cognizant's dividend yield and five-year growth rate, the 5-year yield on cost of Cognizant stock as of today is approximately 2.48%.
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 of 0.26 as of 2024-03-31 suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. Cognizant's profitability rank of 9 out of 10, along with consistent positive net income over the past decade, underscores its strong profitability.
Growth Metrics: The Future Outlook
Cognizant Technology Solutions Corp's growth rank of 9 out of 10 indicates a promising growth trajectory. However, its revenue and earnings growth rates, although solid, are not leading when compared to global competitors. This includes a 3-year revenue growth rate of approximately 7.60% and a 3-year EPS growth rate of about 10.00% per year. Additionally, the company's 5-year EBITDA growth rate stands at 1.30%.
Considering Cognizant Technology Solutions Corp's consistent dividend payments, moderate growth in dividend rates, prudent payout ratios, and robust profitability, the dividends appear sustainable. However, investors should keep an eye on the growth metrics to ensure long-term sustainability. GuruFocus Premium users can explore other high-dividend yield opportunities 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.
