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Itau Unibanco Holding SA's Dividend Analysis

Understanding the Dividend Prospects of Itau Unibanco Holding SA

Itau Unibanco Holding SA (NYSE:ITUB) recently announced a dividend of $0.23 per share, payable on 2024-03-15, with the ex-dividend date set for 2024-02-22. 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 Itau Unibanco Holding SA's dividend performance and assess its sustainability.

What Does Itau Unibanco Holding SA Do?


Itau Unibanco is the largest privately held bank in Brazil, the result of the 2008 merger between Banco Itau and Unibanco. In addition to Brazil, the bank has significant operations in Chile, Colombia, Argentina, Uruguay, and Paraguay. Itau's commercial and consumer loans account for 33% and 44% of the bank's total loans, respectively, while foreign loans account for 23% of its portfolio. The bank also operates the fifth-largest insurer in Brazil and is the second-largest asset manager in the country, giving it broad reach over the Brazilian financial system.

Itau Unibanco Holding SA's Dividend Analysis
Itau Unibanco Holding SA's Dividend Analysis

A Glimpse at Itau Unibanco Holding SA's Dividend History

Itau Unibanco Holding SA has maintained a consistent dividend payment record since 2001. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.

Breaking Down Itau Unibanco Holding SA's Dividend Yield and Growth

As of today, Itau Unibanco Holding SA currently has a 12-month trailing dividend yield of 2.58% and a 12-month forward dividend yield of 2.58%. This suggests an expectation of the same dividend payments over the next 12 months.

Over the past three years, Itau Unibanco Holding SA's annual dividend growth rate was 8.90%. Extended to a five-year horizon, this rate decreased to -2.20% per year. And over the past decade, Itau Unibanco Holding SA's annual dividends per share growth rate stands at an impressive 32.30%.

Based on Itau Unibanco Holding SA's dividend yield and five-year growth rate, the 5-year yield on cost of Itau Unibanco Holding SA stock as of today is approximately 2.31%.

Itau Unibanco Holding SA's Dividend Analysis
Itau Unibanco Holding SA'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 2023-09-30, Itau Unibanco Holding SA's dividend payout ratio is 0.33.

Itau Unibanco Holding SA's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Itau Unibanco Holding SA's profitability 6 out of 10 as of 2023-09-30, suggesting fair profitability. The company has reported positive net income for each 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. Itau Unibanco Holding SA's growth rank of 6 out of 10 suggests that the company has a fair growth outlook.

Revenue is the lifeblood of any company, and Itau Unibanco Holding SA's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Itau Unibanco Holding SA's revenue has increased by approximately 8.70% per year on average, a rate that outperforms approximately 59.96% 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, Itau Unibanco Holding SA's earnings increased by approximately 0.90% per year on average, a rate that outperforms approximately 23.47% of global competitors.

Lastly, the company's 5-year EBITDA growth rate of 1.40%, which outperforms approximately 25.09% of global competitors.

Next Steps

Itau Unibanco Holding SA's consistent dividend payments, combined with a moderate growth rate and a sustainable payout ratio, paint a picture of a company that is committed to returning value to shareholders while maintaining a balance for future growth. The company's solid profitability and fair growth metrics further reinforce the potential for continued dividend sustainability. As investors consider adding Itau Unibanco Holding SA to their portfolios, they should weigh these factors against their investment goals and the broader economic environment. Will Itau Unibanco Holding SA continue its trajectory of dividend reliability and growth, or will market conditions alter its course? For those seeking high-dividend yield opportunities, GuruFocus Premium users can explore further 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.