Assessing the Sustainability and Growth of LEVI's Dividends
Levi Strauss & Co (LEVI, Financial) recently announced a dividend of $0.12 per share, payable on 2024-02-23, with the ex-dividend date set for 2024-02-06. 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 Levi Strauss & Cos dividend performance and assess its sustainability.
What Does Levi Strauss & Co Do?
Levi Strauss & Co is involved in designing, marketing, and selling products that include jeans, casual and dresses pants, tops, shorts, skirts, jackets, footwear, and related accessories directly or through third parties and licensees for men, women, and children under Levi's, Dockers, Signature by Levi Strauss & Co. and Denizen brands. The company manages its business according to three regional segments: the Americas, which is the key revenue driver; Europe; and Asia.
A Glimpse at Levi Strauss & Co's Dividend History
Levi Strauss & Co has maintained a consistent dividend payment record since 2019. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Levi Strauss & Co's Dividend Yield and Growth
As of today, Levi Strauss & Co currently has a 12-month trailing dividend yield of 2.96% and a 12-month forward dividend yield of 2.96%. This suggests an expectation of same dividend payments over the next 12 months. Over the past three years, Levi Strauss & Co's annual dividend growth rate was 44.20%. Based on Levi Strauss & Co's dividend yield and five-year growth rate, the 5-year yield on cost of Levi Strauss & Co stock as of today is approximately 2.96%.
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 2023-11-30, Levi Strauss & Co's dividend payout ratio is 0.44. Levi Strauss & Co's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Levi Strauss & Co's profitability 7 out of 10 as of 2023-11-30, suggesting good profitability prospects. 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. Levi Strauss & Co's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Revenue is the lifeblood of any company, and Levi Strauss & Co's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Levi Strauss & Co's revenue has increased by approximately 11.10% per year on average, a rate that outperforms approximately 72.79% 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, Levi Strauss & Co's earnings increased by approximately 73.70% per year on average, a rate that outperforms approximately 90.16% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 8.70%, which outperforms approximately 53.85% of global competitors.
Next Steps
In conclusion, Levi Strauss & Co's recent declaration of dividends, along with a solid history of dividend payments, reflects the company's commitment to shareholder returns. The impressive dividend growth rate, prudent payout ratio, and strong profitability indicate a sustainable dividend policy. Moreover, the robust growth metrics not only support the current dividends but also hint at the potential for future increases. Investors considering LEVI for their portfolios should weigh these factors carefully. With a forward-looking approach, Levi Strauss & Co appears to be a compelling choice for value investors interested in stable dividend income and growth potential. 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.
