A Comprehensive Analysis of PARA's Dividend Performance and Sustainability
Paramount Global (PARA, Financial) recently announced a dividend of $0.05 per share, payable on 2023-10-02, with the ex-dividend date set for 2023-09-14. As investors eagerly anticipate this forthcoming payment, the company's dividend history, yield, and growth rates also garner attention. Using the data from GuruFocus, let's delve into Paramount Global's dividend performance and assess its sustainability.
Paramount Global: A Brief Overview
Paramount Global is the rebranded fusion of CBS and Viacom, forming a media conglomerate with global reach. CBS contributed Showtime along with its television assets, including the CBS television network, 28 local TV stations, and 50% of CW, a joint venture with WarnerMedia. Viacom added leading cable network properties such as Nickelodeon, MTV, BET, Comedy Central, VH1, CMT, and Paramount. Paramount Pictures produces original films and owns a library of 2,500 films, including the Mission: Impossible and Transformers series. Paramount operates several streaming services, notably Paramount+ and Pluto TV.
Paramount Global's Dividend Track Record
Paramount Global has maintained a consistent dividend payment history since 2003, distributing dividends on a quarterly basis. The company has increased its dividend each year since 2009, earning it the status of a dividend achiever, a distinction given to companies that have raised their dividend each year for at least the past 14 years. Below is a chart demonstrating the annual Dividends Per Share to track historical trends.
Dissecting Paramount Global's Dividend Yield and Growth
As of today, Paramount Global currently boasts a 12-month trailing dividend yield of 5.74% and a 12-month forward dividend yield of 1.49%, indicating an expected decrease in dividend payments over the next 12 months. Over the past three years, Paramount Global's annual dividend growth rate was 7.20%. This rate increased to 7.40% per year when extended to a five-year horizon. Over the past decade, Paramount Global's annual dividends per share growth rate stands at 8.50%. Based on Paramount Global's dividend yield and five-year growth rate, the 5-year yield on cost of Paramount Global stock as of today is approximately 8.20%.
Is Paramount Global's Dividend Sustainable?
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, Paramount Global's dividend payout ratio is 0.00.
Paramount Global's profitability rank of 7 out of 10 as of 2023-06-30 suggests good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Paramount Global's Growth Metrics and Future Outlook
For a company to sustain dividends, it must have robust growth metrics. Paramount Global's growth rank of 7 out of 10 suggests a strong growth trajectory relative to its competitors. The company's revenue per share, combined with the 3-year revenue growth rate, indicates a robust revenue model. Paramount Global's revenue has increased by approximately 2.00% per year on average, a rate that outperforms approximately 55.75% 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, Paramount Global's earnings increased by approximately -41.40% per year on average, a rate that outperforms approximately 11.57% of global competitors. Lastly, the company's 5-year EBITDA growth rate of -19.50%, outperforms approximately 13.24% of global competitors.
Conclusion
Paramount Global's consistent dividend payments, notable growth rate, and low payout ratio, combined with its strong profitability and growth metrics, suggest a promising future for the company's dividend sustainability. However, as with any investment, it's essential for investors to conduct their own due diligence and consider the company's overall financial health and market conditions before making investment decisions.
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