SoftwareONE Holding AG's Dividend Analysis

GuruFocus Research

Mon, Apr 22, 2024, 4:08 AM 4 min read

Assessing the Upcoming Dividend and Company's Financial Health

SoftwareONE Holding AG (SWONF) recently announced a dividend of $0.36 per share, payable on 2024-04-24, with the ex-dividend date set for 2024-04-22. 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 SoftwareONE Holding AG's dividend performance and assess its sustainability.

What Does SoftwareONE Holding AG Do?

Warning! GuruFocus has detected 4 Warning Signs with SWONF.
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SoftwareONE Holding AG is engaged in providing cloud technology solutions. It generates its revenue from Software and Cloud Marketplace by arranging software license agreements between software providers and end customers and managing cloud subscriptions for them (point in time). Revenue from Software and Cloud Services is generated by providing services to customers (over time), the sale of on-premise software only used to provide software asset management solutions and the resale or sale of self-developed on-premise software. EMEA, NORAM, LATAM, and APAC are the geographical segments for the company. It derives maximum revenue from the EMEA segment.

SoftwareONE Holding AG's Dividend Analysis

A Glimpse at SoftwareONE Holding AG's Dividend History

SoftwareONE Holding AG has maintained a consistent dividend payment record since 2022. Dividends are currently distributed on a yearly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.

Breaking Down SoftwareONE Holding AG's Dividend Yield and Growth

As of today, SoftwareONE Holding AG currently has a 12-month trailing dividend yield of 2.16% and a 12-month forward dividend yield of 2.23%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, SoftwareONE Holding AG's annual dividend growth rate was 18.60%. Based on SoftwareONE Holding AG's dividend yield and five-year growth rate, the 5-year yield on cost of SoftwareONE Holding AG stock as of today is approximately 2.16%.

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, SoftwareONE Holding AG's dividend payout ratio is 0.49. SoftwareONE Holding AG's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks SoftwareONE Holding AG's profitability 6 out of 10 as of 2023-12-31, suggesting fair profitability. The company has reported net profit in 7 years out of the past 10 years.

Growth Metrics: The Future Outlook

To ensure the sustainability of dividends, a company must have robust growth metrics. SoftwareONE Holding AG'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 SoftwareONE Holding AG's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. SoftwareONE Holding AG's revenue has increased by approximately 6.50% per year on average, a rate that underperforms than approximately 56.47% 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, SoftwareONE Holding AG's earnings increased by approximately -4.70% per year on average, a rate that underperforms than approximately 68.17% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 2.70%, which underperforms than approximately 67.74% of global competitors.

Concluding Insights on Dividend Viability

In conclusion, SoftwareONE Holding AG's upcoming dividend payout, coupled with a history of consistent dividends and a moderate yield, provides an attractive proposition for income-seeking investors. The company's manageable payout ratio and fair profitability rank suggest a balanced approach to dividend distribution and earnings retention. Moreover, while growth metrics indicate some challenges, the company's overall financial health does not currently raise significant concerns about dividend sustainability. Investors should continue to monitor these factors, especially the revenue and earnings growth rates, to gauge the long-term viability of SoftwareONE Holding AG's dividend payments. 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.

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