An In-depth Examination of the Company's Dividend Performance and Sustainability
MarketAxess Holdings Inc (MKTX, Financial) recently announced a dividend of $0.72 per share, payable on 2023-11-22, with the ex-dividend date set for 2023-11-07. 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 delve into MarketAxess Holdings Inc's dividend performance and assess its sustainability.
What Does MarketAxess Holdings Inc Do?
MarketAxess Holdings Inc, established in 2000, is a prominent electronic fixed-income trading platform that bridges broker/dealers and institutional investors. The company's main trading products are U.S. investment-grade and high-yield bonds, Eurobonds, and Emerging Market corporate debt. Recently, the company has expanded more aggressively into Treasuries and municipal bonds with the acquisitions of LiquidityEdge and MuniBrokers in 2019 and 2021, respectively. The company also provides pre- and post-trade services, with its acquisition of Regulatory Reporting Hub from Deutsche Börse Group in 2020 adding to its product offerings.
A Glimpse at MarketAxess Holdings Inc's Dividend History
Since 2009, MarketAxess Holdings Inc has maintained a consistent dividend payment record, with dividends currently distributed on a quarterly basis. The company has increased its dividend each year since 2009, earning it the title of a dividend achiever, an honor given to companies that have increased their dividend each year for at least the past 14 years.
Breaking Down MarketAxess Holdings Inc's Dividend Yield and Growth
As of today, MarketAxess Holdings Inc has a 12-month trailing dividend yield of 1.30% and a 12-month forward dividend yield of 1.31%, suggesting an expected increase in dividend payments over the next 12 months.
Over the past three years, MarketAxess Holdings Inc's annual dividend growth rate was 11.10%. Extended to a five-year horizon, this rate increased to 16.30% per year. Over the past decade, MarketAxess Holdings Inc's annual dividends per share growth rate stands at an impressive 22.20%.
Based on MarketAxess Holdings Inc's dividend yield and five-year growth rate, the 5-year yield on cost of MarketAxess Holdings Inc stock as of today is approximately 2.77%.
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 2023-09-30, MarketAxess Holdings Inc's dividend payout ratio is 0.43.
MarketAxess Holdings Inc's profitability rank of 10 out of 10 as of 2023-09-30, suggests good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
MarketAxess Holdings Inc's growth rank of 10 out of 10 suggests that the company's growth trajectory is good relative to its competitors. The company's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. MarketAxess Holdings Inc's revenue has increased by approximately 12.30% per year on average, a rate that outperforms approximately 60.79% 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, MarketAxess Holdings Inc's earnings increased by approximately 8.30% per year on average, a rate that outperforms approximately 44.89% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 13.50%, outperforms approximately 56.1% of global competitors.
Conclusion
MarketAxess Holdings Inc's consistent dividend payments, impressive growth rate, manageable payout ratio, and robust profitability and growth metrics make it a compelling consideration for dividend-focused investors. While past performance is not indicative of future results, the company's track record and financial health suggest a sustainable dividend policy. It is, however, crucial for investors to continue monitoring these metrics and the company's overall performance to make informed investment decisions.
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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.
