A comprehensive review of Sims Ltd's dividend history, yield, and growth, and assessing its sustainability.
Sims Ltd (SMSMY, Financial) recently announced a dividend of $0.14 per share, payable on October 30, 2023, with the ex-dividend date set for October 2, 2023. As investors anticipate this upcoming payment, it's crucial to delve into the company's dividend history, yield, and growth rates. Using GuruFocus data, let's explore Sims Ltd's dividend performance and evaluate its sustainability.
Understanding Sims Ltd's Business Model
Sims Limited, born from the 2008 merger of Australia's Sims Group and America's Metal Management, is the world's largest publicly traded metal and electronics recycler. Approximately half of its revenue is generated in North America, with the balance split between Australasia and Europe.
Tracing Sims Ltd's Dividend History
Sims Ltd has upheld a consistent dividend payment track record since 2014, with dividends currently distributed bi-annually. The chart below provides a historical overview of the company's annual Dividends Per Share.
Dissecting Sims Ltd's Dividend Yield and Growth
As of today, Sims Ltd showcases a 12-month trailing dividend yield of 4.79% and a 12-month forward dividend yield of 2.69%. This implies a forecasted decrease in dividend payments in the next 12 months.
Over the past three years, Sims Ltd's annual dividend growth rate has been 36.80%. This rate decreased to 6.30% per year when extended to a five-year horizon. Based on Sims Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Sims Ltd stock as of today is approximately 6.50%.
Evaluating Dividend Sustainability: Payout Ratio and Profitability
The sustainability of a dividend is often gauged by the company's payout ratio. Sims Ltd's dividend payout ratio as of June 30, 2023, is 0.68, indicating a significant portion of earnings retained for future growth and unexpected downturns.
Further, Sims Ltd's profitability rank is 6 out of 10, suggesting fair profitability. The company has reported net profit in 7 out of the past 10 years.
Assessing Growth Metrics for Future Outlook
Sims Ltd's growth rank of 6 out of 10 suggests a fair growth outlook. The company's revenue per share and 3-year revenue growth rate indicate a strong revenue model, with an average yearly increase of approximately 18.90%, outperforming about 75.26% of global competitors.
Conclusion
In conclusion, Sims Ltd's consistent dividend payments, reasonable growth rate, and fair payout ratio indicate a sustainable dividend model. Its profitability and growth metrics suggest the company is well-positioned to maintain its dividend payments in the future. However, investors should continue to monitor these factors to ensure Sims Ltd remains a viable dividend stock.
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