Insights into Atlas Copco AB's Upcoming Dividend Payment
Atlas Copco AB (ATLKY) recently announced a dividend of $0.14 per share, payable on a date yet to be announced, with the ex-dividend date set for 2024-04-25. 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 Atlas Copco AB's dividend performance and assess its sustainability.
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Atlas Copco is a 140-year-old Swedish company that pioneered air compression technology and remains a leading air compressor manufacturer. Atlas Copco is also a leading manufacturer of vacuum pump equipment, industrial power tools, and portable power and air compression equipment. The company's operations match the geographic breadth of its customers, with a presence in 180 countries. Atlas Copco's revenue is derived from three sources: initial equipment sales, spare parts, and maintenance.
Atlas Copco AB's Dividend Analysis
A Glimpse at Atlas Copco AB's Dividend History
Atlas Copco AB has maintained a consistent dividend payment record since 2003. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Atlas Copco AB's Dividend Yield and Growth
As of today, Atlas Copco AB currently has a 12-month trailing dividend yield of 1.33% and a 12-month forward dividend yield of 1.64%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Atlas Copco AB's annual dividend growth rate was 9.50%. Extended to a five-year horizon, this rate decreased to -5.10% per year. And over the past decade, Atlas Copco AB's annual dividends per share growth rate stands at 4.30%.
Based on Atlas Copco AB's dividend yield and five-year growth rate, the 5-year yield on cost of Atlas Copco AB stock as of today is approximately 1.02%.
Atlas Copco AB'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 2023-12-31, Atlas Copco AB's dividend payout ratio is 0.41.
Atlas Copco AB's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Atlas Copco AB's profitability 9 out of 10 as of 2023-12-31, 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. Atlas Copco AB'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 Atlas Copco AB's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Atlas Copco AB's revenue has increased by approximately 20.00% per year on average, a rate that outperforms approximately 79.94% 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, Atlas Copco AB's earnings increased by approximately 23.70% per year on average, a rate that outperforms approximately 65.58% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 12.00%, which outperforms approximately 59.28% of global competitors.
Next Steps
Considering Atlas Copco AB's dividend payments, dividend growth rate, payout ratio, profitability, and growth metrics, investors have several positive indicators of the company's ability to maintain and potentially increase its dividend payments in the future. The combination of a sustainable payout ratio, strong profitability rank, and robust growth metrics provides a solid foundation for Atlas Copco AB to continue rewarding its shareholders. As the company continues to innovate and expand within its industry, the prospects for future dividend growth appear favorable. Investors seeking to diversify their portfolios with high-dividend yield stocks may find Atlas Copco AB an attractive option, and GuruFocus Premium users can further explore such 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.