Yahoo Finance SalMar ASA's Dividend Analysis
Exploring the Sustainability and Growth of SalMar ASA's Dividends
SalMar ASA (SALRY) recently announced a dividend of $0.8 per share, payable on 2024-07-05, with the ex-dividend date set for 2024-06-10. 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 SalMar ASA's dividend performance and assess its sustainability.
What Does SalMar ASA Do?
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SalMar ASA produces and sells farmed salmon internationally. It operates hatcheries and controls the farming at all stages until the fish are ready to be harvested, processed, and packaged into various products. Products are developed with new mixes and packing methods to make it more convenient for customers. The salmon are sold through an in-house salesforce and through close partners of the company. Proximity to customers and tracking the use of resources plays a factor in delivering the raw material.
A Glimpse at SalMar ASA's Dividend History
SalMar ASA 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 SalMar ASA's Dividend Yield and Growth
As of today, SalMar ASA currently has a 12-month trailing dividend yield of 3.36% and a 12-month forward dividend yield of 5.68%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, SalMar ASA's annual dividend growth rate was 15.40%. Extended to a five-year horizon, this rate decreased to 0.80% per year. Based on SalMar ASA's dividend yield and five-year growth rate, the 5-year yield on cost of SalMar ASA stock as of today is approximately 3.50%.
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, SalMar ASA's dividend payout ratio is 1.44, which may suggest that the company's dividend may not be sustainable. SalMar ASA's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks SalMar ASA's profitability 9 out of 10 as of 2024-03-31, 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. SalMar ASA'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 SalMar ASA's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. SalMar ASA's revenue has increased by approximately 23.40% per year on average, a rate that outperforms approximately 85.84% 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, SalMar ASA's earnings increased by approximately 3.50% per year on average, a rate that outperforms approximately 46.13% of global competitors. Lastly, the company's 5-year EBITDA growth rate of -3.80%, which outperforms approximately 28.62% of global competitors.
Conclusion
Considering SalMar ASA's consistent dividend payments, growth in dividend rate, and robust profitability metrics, the company presents an appealing prospect for value investors focused on dividend income. However, the sustainability of these dividends, given the payout ratio and future earnings potential, should be monitored closely. For those interested in exploring 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.
