Assessing the Sustainability and Growth of DHT Holdings Inc's Dividends
DHT Holdings Inc (DHT, Financial) recently announced a dividend of $0.22 per share, payable on 2024-02-28, with the ex-dividend date set for 2024-02-20. 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 DHT Holdings Inc's dividend performance and assess its sustainability.
What Does DHT Holdings Inc Do?
DHT Holdings Inc is a crude oil tanker company. It is an independent crude oil tanker company. Its fleet trades internationally and consists of crude oil tankers in the VLCC. It generates revenues from time charter and spot market operations. Its fleets consist of very large crude carriers known as VLCCs that range in size from 200,000 to 320,000 deadweight tons. Geographically, DHT operates in Monaco, Oslo, Norway, and Singapore.
A Glimpse at DHT Holdings Inc's Dividend History
DHT Holdings Inc has maintained a consistent dividend payment record since 2006. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down DHT Holdings Inc's Dividend Yield and Growth
As of today, DHT Holdings Inc currently has a 12-month trailing dividend yield of 9.97% and a 12-month forward dividend yield of 8.59%. This suggests an expectation of decreased dividend payments over the next 12 months.
Over the past three years, DHT Holdings Inc's annual dividend growth rate was -5.20%. Extended to a five-year horizon, this rate increased to 31.00% per year. And over the past decade, DHT Holdings Inc's annual dividends per share growth rate stands at an impressive 11.60%.
Based on DHT Holdings Inc's dividend yield and five-year growth rate, the 5-year yield on cost of DHT Holdings Inc stock as of today is approximately 38.46%.
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, DHT Holdings Inc's dividend payout ratio is 1.16, which may suggest that the company's dividend may not be sustainable.
DHT Holdings Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks DHT Holdings Inc's profitability 7 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported net profit in 8 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. DHT Holdings Inc's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and DHT Holdings Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. DHT Holdings Inc's revenue has increased by approximately -5.30% per year on average, a rate that underperforms approximately 79.25% 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, DHT Holdings Inc's earnings increased by approximately -16.90% per year on average, a rate that underperforms approximately 83.52% of global competitors.
Conclusion: Evaluating the Dividend Profile of DHT Holdings Inc
In conclusion, while DHT Holdings Inc has shown impressive dividend growth over the past decade, the current payout ratio and recent negative growth rates in revenue and earnings may raise concerns about the sustainability of future dividends. The company's strong profitability rank suggests it has a solid foundation, but investors should monitor the payout ratio and growth metrics closely. With the next dividend payment approaching, it's essential for investors to consider whether DHT Holdings Inc can maintain its dividend amidst the challenges it faces. For investors seeking dividend-paying stocks, GuruFocus Premium offers tools such as the High Dividend Yield Screener to discover opportunities that align with their investment strategies.
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.
