Understanding the Dividend Dynamics of MarketAxess Holdings Inc
MarketAxess Holdings Inc (MKTX, Financial) recently announced a dividend of $0.74 per share, payable on 2024-02-28, with the ex-dividend date set for 2024-02-13. 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 MarketAxess Holdings Inc's dividend performance and assess its sustainability.
What Does MarketAxess Holdings Inc Do?
Founded in 2000, MarketAxess is a leading electronic fixed-income trading platform that connects broker/dealers and institutional investors. The company is primarily focused on credit based fixed income securities with its main trading products being 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
MarketAxess Holdings Inc has maintained a consistent dividend payment record since 2009. Dividends are currently distributed on a quarterly basis. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 15 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down MarketAxess Holdings Inc's Dividend Yield and Growth
As of today, MarketAxess Holdings Inc currently has a 12-month trailing dividend yield of 1.29% and a 12-month forward dividend yield of 1.33%. This suggests an expectation of increased dividend payments over the next 12 months.
MarketAxess Holdings Inc's dividend yield of 1.29% is near a 10-year high and outperforms 30.84% of global competitors in the Capital Markets industry, suggesting that the company's dividend yield stands out as an attractive proposition for income investors.
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. And 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 2.72%.
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 2023-12-31, MarketAxess Holdings Inc's dividend payout ratio is 0.42.
MarketAxess Holdings Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks MarketAxess Holdings Inc's profitability 10 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported positive net income for each of the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. MarketAxess Holdings Inc's growth rank of 10 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and MarketAxess Holdings Inc'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 60.59% 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 44.27% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 13.50%, which outperforms approximately 54.89% of global competitors.
Concluding Thoughts on MarketAxess Holdings Inc's Dividend Prospects
In conclusion, MarketAxess Holdings Inc's dividend payments, dividend growth rate, payout ratio, profitability, and growth metrics paint a promising picture for current and potential investors. The company's strong financial health and commitment to returning value to shareholders through dividends, combined with its growth potential, make it an attractive option for those seeking steady income streams. Investors should continue to monitor MarketAxess Holdings Inc's financial performance and market position to ensure that the dividends remain sustainable in the long term.
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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.
