Assessing the Upcoming Dividend and Financial Health of Arca Continental SAB de CV
Arca Continental SAB de CV (EMBVF, Financial) recently announced a dividend of $2.22 per share, payable on 2023-11-22, with the ex-dividend date set for 2023-11-17. 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 look into Arca Continental SAB de CV's dividend performance and assess its sustainability.
Understanding Arca Continental SAB de CV's Business Model
Arca Continental SAB de CV produces and sells nonalcoholic beverages and snacks, primarily in Latin America. The company is Coca-Cola's bottler in northern and western Mexico, Ecuador, Peru, and northern Argentina. Beverage sales, which consist mostly of Coca-Cola products, account for roughly 90% of the company's total revenue. Other beverage brands include Santa Clara in Mexico and Toni in Ecuador, both of which sell dairy products. The company's snacks brands include Bokados in Mexico, Inalecsa in Ecuador, and Wise in the United States. The majority of the company's sales are in Mexico.
Reviewing Arca Continental SAB de CV's Dividend Track Record
Arca Continental SAB de CV has maintained a consistent dividend payment record since 2018. Dividends are currently distributed on a bi-annual basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Dissecting Arca Continental SAB de CV's Dividend Yield and Growth
As of today, Arca Continental SAB de CV currently has a 12-month trailing dividend yield of 3.43% and a 12-month forward dividend yield of 3.11%. This suggests an expectation of decreased dividend payments over the next 12 months. Over the past three years, Arca Continental SAB de CV's annual dividend growth rate was 39.00%. Extended to a five-year horizon, this rate decreased to 30.00% per year. Based on Arca Continental SAB de CV's dividend yield and five-year growth rate, the 5-year yield on cost of Arca Continental SAB de CV stock as of today is approximately 12.74%.
Evaluating the Sustainability of Arca Continental SAB de CV's Dividends
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, Arca Continental SAB de CV's dividend payout ratio is 0.63. Arca Continental SAB de CV's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Arca Continental SAB de CV's profitability 8 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Arca Continental SAB de CV's Growth Metrics and Future Prospects
To ensure the sustainability of dividends, a company must have robust growth metrics. Arca Continental SAB de CV's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Revenue is the lifeblood of any company, and Arca Continental SAB de CV's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Arca Continental SAB de CV's revenue has increased by approximately 2.10% per year on average, a rate that underperforms than approximately 59.79% 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, Arca Continental SAB de CV's earnings increased by approximately 15.40% per year on average, a rate that underperforms than approximately 35.56% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 9.60%, which underperforms than approximately 38.81% of global competitors.
Conclusion: Arca Continental SAB de CV's Dividend Outlook
In conclusion, while Arca Continental SAB de CV has a history of consistent dividend payments and a respectable dividend yield, the expected decrease in dividend payments and underperformance in growth metrics relative to global competitors may concern some investors. However, a strong profitability rank and a reasonable payout ratio suggest that the company is in a good position to maintain its dividend payments. Investors should weigh these factors alongside their investment strategies and consider the overall financial health and growth prospects of Arca Continental SAB de CV.
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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.
