Yahoo Finance FinVolution Group's Dividend Analysis
Examining the Dividend Performance and Prospects of FinVolution Group (NYSE:FINV)
FinVolution Group (NYSE:FINV) recently announced a dividend of $0.24 per share, payable on 2024-05-07, with the ex-dividend date set for 2024-04-15. 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 FinVolution Group's dividend performance and assess its sustainability.
What Does FinVolution Group Do?
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FinVolution Group is a provider of online consumer finance in China. It offers various loan products, making financial services available to borrowers anytime, anywhere; designs a loan transaction process, and offers tailored risk-based pricing. It offers short-term loans to borrowers to meet immediate credit needs while allowing them to gradually establish their credit history through activities on the company's platform. The company provides investors with an opportunity to invest in an emerging asset class-consumer loans through a variety of investment options. It generates revenues from fees charged to borrowers. The Group's long-lived assets are located in the PRC and its revenues are derived from within the PRC.
A Glimpse at FinVolution Group's Dividend History
FinVolution Group has maintained a consistent dividend payment record since 2019. Dividends are currently distributed on a yearly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down FinVolution Group's Dividend Yield and Growth
As of today, FinVolution Group currently has a 12-month trailing dividend yield of 4.30% and a 12-month forward dividend yield of 4.74%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, FinVolution Group's annual dividend growth rate was 2.30%. Based on FinVolution Group's dividend yield and five-year growth rate, the 5-year yield on cost of FinVolution Group stock as of today is approximately 4.30%.
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 2023-09-30, FinVolution Group's dividend payout ratio is 0.17.
FinVolution Group's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks FinVolution Group's profitability 8 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported net profit in 7 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. FinVolution Group'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 FinVolution Group's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. FinVolution Group's revenue has increased by approximately 26.70% per year on average, a rate that outperforms approximately 79.63% 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, FinVolution Group's earnings increased by approximately 0.60% per year on average, a rate that outperforms approximately 37.34% of global competitors.
Next Steps
In conclusion, FinVolution Group's upcoming dividend payment, consistent dividend history, and promising yield and growth rates reflect its commitment to shareholder returns. The company's low payout ratio and strong profitability rank underscore its ability to sustain and potentially increase dividends in the future. Furthermore, robust growth metrics, such as revenue per share and EPS growth rate, provide a positive outlook for the company's financial health. As FinVolution Group continues to navigate the dynamic financial landscape, value investors may find the stock's dividend profile particularly attractive. Will FinVolution Group's strategic initiatives and market position allow it to continue rewarding investors with attractive dividends? Only time will tell, but the indicators certainly point towards a positive trajectory. For those interested in high-dividend yield opportunities, GuruFocus Premium users can screen for such 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.
