Exploring the Sustainability of Geberit AG's Upcoming Dividend
Geberit AG (GBERY) recently announced a dividend of $1.41 per share, payable on 2024-05-08, with the ex-dividend date set for 2024-04-19. 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 Geberit AG's dividend performance and assess its sustainability.
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Geberit AG is a leading manufacturer of sanitary products, which include flushing systems, piping systems, and bathroom ceramics. Products are primarily sold through the wholesale channel. Geberit has an extensive history in sanitary products, having filed a patent for its first flushing mechanism in 1912. The company generates sales in 50 countries and operates 26 production plants, the majority of which are in Europe. Geberit shares are listed on the SIX Swiss Exchange. The majority of sales are generated from residential and renovation activities.
Geberit AG's Dividend Analysis
A Glimpse at Geberit AG's Dividend History
Geberit AG has maintained a consistent dividend payment record since 2011. Dividends are currently distributed on a yearly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Geberit AG's Dividend Analysis
Breaking Down Geberit AG's Dividend Yield and Growth
As of today, Geberit AG currently has a 12-month trailing dividend yield of 2.56% and a 12-month forward dividend yield of 2.57%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Geberit AG's annual dividend growth rate was 3.70%. Extended to a five-year horizon, this rate increased to 4.10% per year. And over the past decade, Geberit AG's annual dividends per share growth rate stands at an impressive 10.70%.
Based on Geberit AG's dividend yield and five-year growth rate, the 5-year yield on cost of Geberit AG stock as of today is approximately 3.13%.
Geberit AG'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, Geberit AG's dividend payout ratio is 0.68.
Geberit AG's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Geberit AG's profitability 8 out of 10 as of 2023-12-31, suggesting good profitability prospects. 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. Geberit AG'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 Geberit AG's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Geberit AG's revenue has increased by approximately 3.30% per year on average, a rate that underperforms approximately 55.1% 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, Geberit AG's earnings increased by approximately 0.90% per year on average, a rate that underperforms approximately 60.2% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 3.30%, which underperforms approximately 55.21% of global competitors.
Next Steps
In conclusion, Geberit AG's consistent dividend history, coupled with a moderate dividend yield and growth rate, presents an attractive proposition for income-seeking investors. The company's responsible payout ratio and strong profitability rank underscore the sustainability of its dividend payments. However, investors should also consider the mixed growth metrics, which indicate some areas where Geberit AG lags behind its competitors. As the company navigates through the evolving landscape of the sanitary products industry, maintaining a balance between dividend payments and investment in growth will be crucial. Investors should continue to monitor Geberit AG's financial health and market position to make informed decisions about their holdings.
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.