Exploring the Sustainability and Growth of Glencore PLC's Dividend Payments
Introduction to Glencore PLC's Upcoming Dividend
Glencore PLC (GLNCY, Financial) recently announced a dividend of $0.13 per share, payable on 2024-06-20, with the ex-dividend date set for 2024-05-02. 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 delve into Glencore PLC's dividend performance and assess its sustainability.
What Does Glencore PLC Do?
Glencore is one of the world's largest commodities traders, active in markets for metals and minerals, energy products, and agricultural goods. The firm's Marketing business provides sourcing, logistics, transportation, storage, and financing services to commodity producers and consumers around the globe. Core exposures are in the production of thermal coal, coking coal, copper, zinc, nickel, cobalt, and ferroalloys. Unlike other major miners, Glencore plans to produce thermal coal until its mines exhaust, arguing that it is better for listed, western companies to own these assets and then rehabilitate them consistent with western standards. It has also agreed to buy Teck's metallurgical coal business, with the deal likely closing in the third quarter of 2024.
A Glimpse at Glencore PLC's Dividend History
Glencore PLC has maintained a consistent dividend payment record since 2021. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Glencore PLC's Dividend Yield and Growth
As of today, Glencore PLC currently has a 12-month trailing dividend yield of 8.92% and a 12-month forward dividend yield of 6.28%. This suggests an expectation of decreased dividend payments over the next 12 months. Based on Glencore PLC's dividend yield and five-year growth rate, the 5-year yield on cost of Glencore PLC stock as of today is approximately 8.92%.
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, Glencore PLC's dividend payout ratio is 1.18, which may suggest that the company's dividend may not be sustainable. Glencore PLC's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Glencore PLC's profitability 6 out of 10 as of 2023-12-31, suggesting fair profitability. The company has reported net profit in 7 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Glencore PLC's growth rank of 6 out of 10 suggests that the company has a fair growth outlook. Revenue is the lifeblood of any company, and Glencore PLC's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Glencore PLC's revenue has increased by approximately 19.70% per year on average, a rate that outperforms approximately 70.59% 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, Glencore PLC's earnings increased by approximately 45.90% per year on average, a rate that outperforms approximately 88.68% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 31.40%, which outperforms approximately 82.47% of global competitors.
Conclusion
Considering Glencore PLC's robust dividend history, current yield indications, and growth metrics, the company presents a compelling case for investors seeking dividend income combined with growth potential. While the payout ratio suggests caution, the overall financial health and strategic market positioning of Glencore may continue to support its dividend payments. Investors should keep an eye on the upcoming developments and sector trends that might impact Glencore's financial stability and dividend sustainability. 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.
