Yahoo Finance Edenred SE's Dividend Analysis
Exploring the Sustainability and Growth Prospects of Edenred SE's Dividends
Edenred SE (EDNMY) recently announced a dividend of $0.59 per share, payable on June 27, 2024, with the ex-dividend date set for June 7, 2024. 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 Edenred SE's dividend performance and assess its sustainability.
What Does Edenred SE Do?
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Edenred is a France-listed prepaid corporate services provider operating in more than 40 countries. The company was listed in 2010 following a spinoff from hotel group Accor. Edenred's main business, Ticket Restaurant, offers prepaid meal vouchers that employers provide to their employees as an additional benefit. The company is also involved in other areas such as prepaid fuel cards and payment and expense-management systems.
A Glimpse at Edenred SE's Dividend History
Edenred SE has maintained a consistent dividend payment record since 2014. Dividends are currently distributed on a yearly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Edenred SE's Dividend Yield and Growth
As of today, Edenred SE currently has a 12-month trailing dividend yield of 2.13% and a 12-month forward dividend yield of 2.37%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Edenred SE's annual dividend growth rate was 12.60%. Extended to a five-year horizon, this rate decreased to 3.00% per year. And over the past decade, Edenred SE's annual dividends per share growth rate stands at 7.40%.
Based on Edenred SE's dividend yield and five-year growth rate, the 5-year yield on cost of Edenred SE stock as of today is approximately 2.47%.
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 December 31, 2023, Edenred SE's dividend payout ratio is 0.79, which may suggest that the company's dividend may not be sustainable.
Edenred SE's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Edenred SE's profitability 9 out of 10 as of December 31, 2023, 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. Edenred SE'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 Edenred SE's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Edenred SE's revenue has increased by approximately 16.80% per year on average, a rate that outperforms approximately 65.3% 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, Edenred SE's earnings increased by approximately 3.50% per year on average, a rate that outperforms approximately 38.89% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 1.90%, which outperforms approximately 39.37% of global competitors.
Conclusion
Given Edenred SE's consistent dividend payments, robust dividend growth rate, reasonable payout ratio, strong profitability, and solid growth metrics, the company presents a compelling case for investors seeking sustainable dividend income. However, ongoing monitoring of these financial health indicators is recommended to ensure continued confidence in the dividend's sustainability. 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.
