Understanding the Dividend Performance and Sustainability of MSCI Inc
MSCI Inc(MSCI, Financial) recently announced a dividend of $1.38 per share, payable on 2023-11-30, with the ex-dividend date set for 2023-11-08. 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 delve into MSCI Inc's dividend performance and assess its sustainability.
What Does MSCI Inc Do?
MSCI Inc is committed to enabling investors to build better portfolios for a better world. Its largest and most profitable segment is its index segment, providing benchmarking to asset managers and asset owners. With over $1.3 trillion in ETF assets linked to MSCI indexes, the company has a significant presence in the market. The MSCI analytics segment offers portfolio and risk management analytics software to asset managers and asset owners. In 2021, MSCI expanded its operations by introducing ESG and climate, and private assets segments. These segments provide ESG data to the investment industry and real estate reporting, market data, benchmarking, and analytics to investors and real estate managers respectively.
A Glimpse at MSCI Inc's Dividend History
Since 2014, MSCI Inc has maintained a steady dividend payment record, distributing dividends on a quarterly basis. The chart below illustrates the company's annual Dividends Per Share for tracking historical trends.
Breaking Down MSCI Inc's Dividend Yield and Growth
As of today, MSCI Inc has a 12-month trailing dividend yield of 1.07% and a 12-month forward dividend yield of 1.10%, indicating an expected increase in dividend payments over the next 12 months.
Over the past three years, MSCI Inc's annual dividend growth rate was 22.00%. This rate increased to 26.70% per year when extended to a five-year horizon. Based on MSCI Inc's dividend yield and five-year growth rate, the 5-year yield on cost of MSCI Inc stock as of today is approximately 3.49%.
The Sustainability Question: Payout Ratio and Profitability
To evaluate the sustainability of the dividend, it's essential to consider the company's payout ratio. The dividend payout ratio indicates the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, providing a safety net for future growth and unexpected downturns. As of 2023-09-30, MSCI Inc's dividend payout ratio is 0.45.
MSCI Inc's profitability rank of 10 out of 10 as of 2023-09-30 suggests strong 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
For dividends to be sustainable, a company must have robust growth metrics. MSCI Inc's growth rank of 10 out of 10 suggests a strong growth trajectory relative to its competitors.
Revenue is crucial for any company, and MSCI Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a robust revenue model. With an approximate increase of 15.00% per year on average, MSCI Inc's revenue growth rate outperforms approximately 65.2% 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. Over the past three years, MSCI Inc's earnings have increased by approximately 17.60% per year on average, outperforming approximately 59.33% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 23.20% outperforms approximately 72.36% of global competitors, indicating a strong earnings potential.
Conclusion
In conclusion, MSCI Inc presents a promising dividend profile with its consistent dividend payments, steady growth rate, manageable payout ratio, high profitability, and robust growth metrics. These factors collectively suggest that MSCI Inc is well-positioned to sustain its dividend payments in the foreseeable future, making it an attractive choice for value investors seeking steady income streams.
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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.
