Exploring the Dividend Performance and Sustainability of Swiss Life Holding AG (SZLMY, Financial)
Introduction to Swiss Life Holding AG's Upcoming Dividend
Swiss Life Holding AG (SZLMY) recently announced a dividend of $1.81 per share, payable on 2024-06-06, with the ex-dividend date set for 2024-05-20. 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 Swiss Life Holding AG's dividend performance and assess its sustainability.
What Does Swiss Life Holding AG Do?
Swiss Life Holding AG is predominantly a life and long-term savings company that generates the main share of its revenue and earnings from its domestic market of Switzerland. The company also operates in France, Germany, and a few smaller, but wealthy European markets. Swiss Life has three main sources of income that vary in importance by geography. Savings income relates to spread-based earnings, the risk result relates to an insurance margin, and the fee result relates to asset management and its financial advisor network. The fee result has been growing in importance over recent years as a result of advice, unit-linked sales, and third-party asset management.
A Glimpse at Swiss Life Holding AG's Dividend History
Swiss Life Holding AG has maintained a consistent dividend payment record since 2012, distributing dividends on a yearly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Swiss Life Holding AG's Dividend Yield and Growth
As of today, Swiss Life Holding AG currently has a 12-month trailing dividend yield of 4.58% and a 12-month forward dividend yield of 4.95%, suggesting an expectation of increased dividend payments over the next 12 months. Over the past three years, Swiss Life Holding AG's annual dividend growth rate was 26.00%. Extended to a five-year horizon, this rate decreased to 17.30% per year. And over the past decade, Swiss Life Holding AG's annual dividends per share growth rate stands at an impressive 20.60%.
Based on Swiss Life Holding AG's dividend yield and five-year growth rate, the 5-year yield on cost of Swiss Life Holding AG stock as of today is approximately 10.17%.
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 2023-12-31, Swiss Life Holding AG's dividend payout ratio is 0.83, suggesting that the company's dividend may not be sustainable. Swiss Life Holding AG's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Swiss Life Holding AG's profitability 5 out of 10 as of 2023-12-31, suggesting fair profitability. The company has reported positive net income for each 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. Swiss Life Holding AG's growth rank of 5 out of 10 suggests that the company has a fair growth outlook. Revenue is the lifeblood of any company, and Swiss Life Holding AG's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Swiss Life Holding AG's revenue has increased by approximately -3.50% per year on average, a rate that underperforms than approximately 75.58% 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, Swiss Life Holding AG's earnings increased by approximately 2.30% per year on average, a rate that underperforms than approximately 61.88% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 2.60%, which underperforms than approximately 61.74% of global competitors.
Conclusion
Swiss Life Holding AG's dividend payments, dividend growth rate, payout ratio, profitability, and growth metrics present a mixed picture. While the company has shown a strong history of dividend growth and maintains a decent yield, concerns about its payout ratio and mixed growth metrics suggest that investors should keep a close watch on future developments. For those interested in exploring further, 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.
