SGS AG's Dividend Analysis
In This Article:
Exploring the Sustainability and Growth of SGS AG's Dividends
SGS AG(SGSOY) recently announced a dividend of $0.36 per share, payable on 2024-04-19, with the ex-dividend date set for 2024-04-02. 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 SGS AGs dividend performance and assess its sustainability.
What Does SGS AG Do?
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Switzerland-listed SGS is the largest and one of the oldest companies in the testing, inspection, and certification industry. The company's primary activities involve testing products and materials, inspecting sites/industrial equipment, and certifying products and systems to ensure global/company standards. SGS is one of only four TIC companies that operate globally across numerous industries, including agriculture, food and life science, and transport services. SGS was first listed in 1981 and employs almost 100,000 people worldwide.
A Glimpse at SGS AG's Dividend History
SGS AG has maintained a consistent dividend payment record since 2009. Dividends are currently distributed on a yearly basis.
Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down SGS AG's Dividend Yield and Growth
As of today, SGS AG currently has a 12-month trailing dividend yield of 3.62% and a 12-month forward dividend yield of 3.75%. This suggests an expectation of increased dividend payments over the next 12 months.
Extended to a five-year horizon, this rate increased to 1.20% per year. And over the past decade, SGS AG's annual dividends per share growth rate stands at 6.20%.
Based on SGS AG's dividend yield and five-year growth rate, the 5-year yield on cost of SGS AG stock as of today is approximately 3.84%.
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, SGS AG's dividend payout ratio is 0.99, which may suggest that the company's dividend may not be sustainable.