Assessing the Sustainability of Intouch Holdings PCL's Upcoming Dividend
Intouch Holdings PCL (SHNUF, Financial) recently announced a dividend of $1.7 per share, payable on 2024-04-19, with the ex-dividend date set for 2024-02-20. 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 Intouch Holdings PCL's dividend performance and assess its sustainability.
What Does Intouch Holdings PCL Do?
Intouch Holdings PCL is an investment holding company, which predominantly invests money in telecommunications, media, and technology. The company generates the vast majority of its revenue in Thailand. It operates through two main business segments: wireless telecommunications and satellite & international businesses. The company's wireless telecommunications business is composed of Info Service and is the majority of overall revenue. Info Service is a triple-play telecommunications provider. The company generates revenue from the provision of mobile phone services, mobile handset sales, and broadband services. Intouch's satellite and the international business segment is a holding in Thaicom, which is a satellite operator, which generates revenue from providing satellite services.
A Glimpse at Intouch Holdings PCL's Dividend History
Intouch Holdings PCL has maintained a consistent dividend payment record since 2011. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Intouch Holdings PCL's Dividend Yield and Growth
As of today, Intouch Holdings PCL currently has a 12-month trailing dividend yield of 4.33% and a 12-month forward dividend yield of 4.78%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Intouch Holdings PCL's annual dividend growth rate was 7.30%. Extended to a five-year horizon, this rate decreased to 3.80% per year. And over the past decade, Intouch Holdings PCL's annual dividends per share growth rate stands at -5.20%.
Based on Intouch Holdings PCL's dividend yield and five-year growth rate, the 5-year yield on cost of Intouch Holdings PCL stock as of today is approximately 5.22%.
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, Intouch Holdings PCL's dividend payout ratio is 0.74, which may suggest that the company's dividend may not be sustainable.
Intouch Holdings PCL's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Intouch Holdings PCL's profitability 4 out of 10 as of 2023-12-31, suggesting the dividend may not be sustainable. The company has reported positive net income for each of year over 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. Intouch Holdings PCL's growth rank of 4 out of 10 suggests that the company has poor growth prospects and thus, the dividend may not be sustainable.
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, Intouch Holdings PCL's earnings increased by approximately 7.90% per year on average, a rate that outperforms approximately 55.02% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -0.40%, which outperforms approximately 32.52% of global competitors.
Next Steps
When considering Intouch Holdings PCL's dividend payments, investors should weigh the company's consistent dividend history against the current payout ratio and profitability rank. While the growth metrics present a mixed picture, the solid earnings performance may provide some reassurance. However, the sustainability of Intouch Holdings PCL's dividends will largely depend on future earnings and growth potential. Investors should continue to monitor these factors closely, assessing whether Intouch Holdings PCL can maintain its dividend commitments while pursuing strategic growth opportunities. As always, due diligence is key when evaluating any investment decision. For those seeking high-dividend yield stocks, GuruFocus Premium users can screen for attractive options 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.
