Insight into Upcoming Dividends and Sustainability Factors
Washington H Soul Pattinson & Co Ltd (WSOUF, Financial) recently announced a dividend of $0.51 per share, payable on 2023-12-12, 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 Washington H Soul Pattinson & Co Ltd's dividend performance and assess its sustainability.
What Does Washington H Soul Pattinson & Co Ltd Do?
Washington H. Soul Pattinson, or WHSP, is a value-oriented investment house which invests in public and privately held companies. As an investor, WHSP allocates capital with a view to taking a long-term position in its investments and on a passive basis. A long-held cross-shareholding in one of its investments—Brickworks—has provided a shield to WHSP from the short term-ism that is often pervasive in equity markets.
A Glimpse at Washington H Soul Pattinson & Co Ltd's Dividend History
Washington H Soul Pattinson & Co Ltd has maintained a consistent dividend payment record since 2020. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Washington H Soul Pattinson & Co Ltd's Dividend Yield and Growth
As of today, Washington H Soul Pattinson & Co Ltd currently has a 12-month trailing dividend yield of 2.60% and a 12-month forward dividend yield of 2.76%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Washington H Soul Pattinson & Co Ltd's annual dividend growth rate was 10.20%. Extended to a five-year horizon, this rate decreased to 6.60% per year. And over the past decade, Washington H Soul Pattinson & Co Ltd's annual dividends per share growth rate stands at 4.80%.
Based on Washington H Soul Pattinson & Co Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Washington H Soul Pattinson & Co Ltd stock as of today is approximately 3.58%.
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 2023-07-31, Washington H Soul Pattinson & Co Ltd's dividend payout ratio is 0.36.
Washington H Soul Pattinson & Co Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Washington H Soul Pattinson & Co Ltd's profitability 5 out of 10 as of 2023-07-31, suggesting fair profitability. The company has reported net profit in 9 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Washington H Soul Pattinson & Co Ltd's growth rank of 5 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and Washington H Soul Pattinson & Co Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. However, Washington H Soul Pattinson & Co Ltd's revenue has decreased by approximately -40.90% per year on average, a rate that underperforms approximately 93.8% 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, Washington H Soul Pattinson & Co Ltd's earnings decreased by approximately -21.10% per year on average, a rate that underperforms approximately 82.39% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 8.70%, underperforms approximately 56.76% of global competitors.
Next Steps
In conclusion, while Washington H Soul Pattinson & Co Ltd has a history of consistent dividend payments and a reasonable payout ratio, the company's underlying growth metrics and profitability present a mixed picture. The negative revenue and EPS growth rates may raise concerns about the long-term sustainability of the dividend. However, the company's long-term investment approach and its ability to maintain profitability over the years may provide some reassurance to investors. As with any investment, it's crucial to weigh these factors in the context of your individual strategy and risk tolerance. For those interested in dividend investing, GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
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.
