Exploring the Dividend Future and Financial Health of State Bank of India (SBKFF, Financial)
State Bank of India (SBKFF) recently announced a dividend of $1.64 per share, payable on a to-be-announced date, with the ex-dividend date set for 2024-05-21. 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 State Bank of India's dividend performance and assess its sustainability.
What Does State Bank of India Do?
State Bank of India is a comprehensive bank in India, operating across various segments including Treasury, Corporate/Wholesale Banking, and Retail Banking. The bank generates maximum revenue from its Retail Banking segment, which encompasses personal banking activities and lending operations to corporate customers linked with retail branches. Geographically, it derives a majority of its revenue from India, establishing a strong domestic presence.
A Glimpse at State Bank of India's Dividend History
State Bank of India has maintained a consistent dividend payment record since 2021, with dividends currently distributed on a yearly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down State Bank of India's Dividend Yield and Growth
As of today, State Bank of India currently has a 12-month trailing dividend yield of 1.49% and a 12-month forward dividend yield of 1.78%. This suggests an expectation of increased dividend payments over the next 12 months.
Based on State Bank of India's dividend yield and five-year growth rate, the 5-year yield on cost of State Bank of India stock as of today is approximately 1.49%.
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. As of 2024-03-31, State Bank of India's dividend payout ratio is 0.15, indicating that the company retains a significant part of its earnings for future growth and unexpected downturns.
State Bank of India's profitability rank of 6 out of 10, as of 2024-03-31, suggests fair profitability, with the company reporting net profit in 9 out of the past 10 years.
Growth Metrics: The Future Outlook
Ensuring the sustainability of dividends requires robust growth metrics. State Bank of India's growth rank of 6 out of 10 suggests a fair growth outlook. The company's revenue per share, combined with a 3-year revenue growth rate of approximately 21.30% per year, outperforms about 87.33% of global competitors. Furthermore, its 3-year EPS growth rate of approximately 44.10% per year and a 5-year EBITDA growth rate of 79.00% also outperform a significant portion of global competitors.
Concluding Thoughts on State Bank of India's Dividend Sustainability
Considering State Bank of India's consistent dividend payments, favorable growth rate, and a prudent payout ratio, the bank stands as a potentially reliable option for dividend-seeking investors. The bank's robust financial health and strategic positioning in the Indian banking sector further bolster confidence in its ability to sustain dividend distributions in the foreseeable future. Investors interested in high-dividend yield stocks may consider exploring further with GuruFocus's 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.
