An In-depth Look at the Dividend Performance and Sustainability of Coats Group PLC (CGGGF, Financial)
Coats Group PLC (CGGGF) recently announced a dividend of $0.01 per share, payable on 2023-11-15, with the ex-dividend date set for 2023-10-19. As investors eagerly anticipate this forthcoming payment, it's crucial to delve into the company's dividend history, yield, and growth rates. Using data from GuruFocus, this article will explore Coats Group PLC's dividend performance and assess its sustainability.
Understanding Coats Group PLC
Coats Group PLC is a firm that manufactures thread for both industrial and consumer applications. Its product portfolio comprises industrial thread and knitting yarns used predominantly in the apparel and footwear industry. The company operates across six continents, including Asia, America, Europe, the Middle East, and Africa, with Asia contributing the highest revenue.
A Glimpse at Coats Group PLC's Dividend History
Since 2021, Coats Group PLC has maintained a consistent dividend payment record, distributing dividends bi-annually. The chart below displays the annual Dividends Per Share for historical trend tracking.
Breaking Down Coats Group PLC's Dividend Yield and Growth
As of today, Coats Group PLC has a 12-month trailing dividend yield of 2.63% and a 12-month forward dividend yield of 2.75%. This suggests an expected increase in dividend payments over the next 12 months. Over the past three years, the company's annual dividend growth rate was 11.50%.
Based on the company's dividend yield and five-year growth rate, the 5-year yield on cost of Coats Group PLC stock as of today is approximately 2.63%.
The Sustainability Question: Payout Ratio and Profitability
The sustainability of a dividend can be evaluated by examining the company's payout ratio. The dividend payout ratio provides insight into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, ensuring the availability of funds for future growth and unexpected downturns. As of 2023-06-30, Coats Group PLC's dividend payout ratio is 0.84, which may suggest that the company's dividend may not be sustainable.
Coats Group PLC's profitability rank offers an understanding of the company's earnings prowess relative to its peers. As of 2023-06-30, GuruFocus ranks Coats Group PLC's profitability 7 out of 10, suggesting good profitability prospects. The company has reported net profit in 8 years out of the past 10 years.
Growth Metrics: The Future Outlook
For a company to sustain dividends, robust growth metrics are essential. Coats Group PLC's growth rank of 7 out of 10 suggests a promising growth trajectory relative to its competitors. The company's revenue per share and 3-year revenue growth rate indicate a strong revenue model. Coats Group PLC's revenue has increased by approximately 5.40% per year on average, outperforming approximately 58.71% 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, Coats Group PLC's earnings increased by approximately -7.90% per year on average, outperforming approximately 28.24% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 0.20% outperforms approximately 35.7% of global competitors.
Conclusion
In conclusion, while Coats Group PLC's dividend payments and growth rate are promising, investors must consider the company's relatively high payout ratio. Despite this, the company's strong profitability and growth metrics suggest a positive outlook. However, it is crucial for investors to continually monitor these factors to ensure the sustainability of the dividends.
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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.
