Unveiling the dividend history, yield, growth, and future prospects of VF Corp (VFC, Financial)
VF Corp (VFC) recently announced a dividend of $0.3 per share, payable on 2023-09-20, with the ex-dividend date set for 2023-09-08. 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 deep dive into VF Corp's dividend performance and assess its sustainability.
What Does VF Corp Do?
VF Corp designs, produces, and distributes branded apparel, footwear, and accessories. Its apparel categories are active, outdoor, and work. Its portfolio of about a dozen brands includes Vans, The North Face, Timberland, Supreme, and Dickies. VF Corp markets its products in the Americas, Europe, and Asia-Pacific through wholesale sales to retailers, e-commerce, and branded stores owned by the company and partners. The company has grown through multiple acquisitions and traces its roots to 1899.
A Glimpse at VF Corp's Dividend History
VF Corp has maintained a consistent dividend payment record since 1973. Dividends are currently distributed on a quarterly basis. VF Corp has increased its dividend each year since 1973. The stock is thus listed as a dividend king, an honor that is given to companies that have increased their dividend each year for at least the past 50 years.
Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down VF Corp's Dividend Yield and Growth
As of today, VF Corp currently has a 12-month trailing dividend yield of 8.38% and a 12-month forward dividend yield of 6.28%. This suggests an expectation of decrease dividend payments over the next 12 months.
Over the past three years, VF Corp's annual dividend growth rate was -1.60%. Based on VF Corp's dividend yield and five-year growth rate, the 5-year yield on cost of VF Corp stock as of today is approximately 8.38%.
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 2023-06-30, VF Corp's dividend payout ratio is 5.37, which may suggest that the company's dividend may not be sustainable.
VF Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks VF Corp's profitability 6 out of 10 as of 2023-06-30, suggesting fair profitability. The company has reported net profit in 9 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. VF Corp'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 VF Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. VF Corp's revenue has increased by approximately 4.50% per year on average, a rate that outperforms approximately 55.71% 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, VF Corp's earnings increased by approximately -41.80% per year on average, a rate that outperforms approximately 9.65% of global competitors.
Conclusion
VF Corp's consistent dividend payment history, coupled with its status as a dividend king, make it a potential candidate for dividend-focused investors. However, its negative dividend growth rate and low payout ratio may raise concerns about the sustainability of its dividends. Furthermore, while the company has a fair growth outlook, its earnings growth rate is relatively low compared to global competitors. Therefore, investors should carefully consider these factors before making investment decisions.
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