Exploring the Sustainability and Growth of Dividends
The Goldman Sachs Group Inc (GS, Financial) recently announced a dividend of $2.75 per share, payable on 2024-06-27, with the ex-dividend date set for 2024-05-30. 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 The Goldman Sachs Group Inc's dividend performance and assess its sustainability.
What Does The Goldman Sachs Group Inc Do?
Goldman Sachs is a leading global investment banking and asset management firm. Approximately 20% of its revenue comes from investment banking, 45% from trading, 20% from asset management, and 15% from wealth management and retail financial services. Around 60% of the company's net revenue is generated in the Americas, 15% in Asia, and 25% in Europe, the Middle East, and Africa.
A Glimpse at The Goldman Sachs Group Inc's Dividend History
The Goldman Sachs Group Inc has maintained a consistent dividend payment record since 1999, with dividends currently distributed on a quarterly basis. The company has increased its dividend each year since 2010, earning it the status of a dividend achiever. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down The Goldman Sachs Group Inc's Dividend Yield and Growth
The Goldman Sachs Group Inc currently has a 12-month trailing dividend yield of 2.32% and a 12-month forward dividend yield of 2.39%, suggesting an expectation of increasing dividend payments over the next 12 months. Over the past three years, The Goldman Sachs Group Inc's annual dividend growth rate was 28.10%, decreasing slightly to 27.90% per year over a five-year horizon, and standing at an impressive 18.00% over the past decade. Based on The Goldman Sachs Group Inc's current yield and five-year growth rate, the 5-year yield on cost is approximately 7.94%.
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 of The Goldman Sachs Group Inc is 0.38 as of 2024-03-31. The company's profitability rank of 6 out of 10, combined with consistent positive net income over the past decade, suggests fair profitability.
Growth Metrics: The Future Outlook
The Goldman Sachs Group Inc's growth rank of 6 out of 10 indicates a fair growth outlook. Despite a strong revenue per share performance, its 3-year revenue growth rate of 2.60% slightly underperforms against global competitors. Furthermore, the 3-year EPS growth rate and 5-year EBITDA growth rate also show underperformance, suggesting areas for potential improvement.
Conclusion
The Goldman Sachs Group Inc's consistent dividend increases, reasonable payout ratio, and solid profitability underscore its dividend sustainability. However, investors should monitor its growth metrics closely, as they show some areas of underperformance. For those interested in high-dividend yield stocks, GuruFocus Premium offers a High Dividend Yield Screener to discover more opportunities.
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.
