Exploring the Sustainability and Prospects of Dow Inc's Dividends
Dow Inc (DOW, Financial) recently announced a dividend of $0.7 per share, payable on June 14, 2024, with the ex-dividend date set for May 30, 2024. As investors eagerly anticipate this upcoming payment, it's crucial to delve into the company's dividend history, yield, and growth rates. This analysis utilizes data from GuruFocus to evaluate the sustainability and attractiveness of Dow Inc's dividends.
What Does Dow Inc Do?
Dow Inc, formed in 2019 from the DowDuPont merger and subsequent separations, is a global leader in chemical production. The company specializes in manufacturing a wide range of chemicals, including polyethylene, ethylene oxide, and silicone rubber, which find applications across diverse consumer and industrial markets.
A Glimpse at Dow Inc's Dividend History
Since its inception in 2019, Dow Inc has established a solid track record of consistent dividend payments, disbursed quarterly. The following chart illustrates the annual Dividends Per Share, providing a visual representation of Dow Inc's historical dividend trends.
Breaking Down Dow Inc's Dividend Yield and Growth
Dow Inc currently boasts a 12-month trailing dividend yield of 4.82% and a matching 12-month forward dividend yield of 4.82%, indicating stable expected dividend payments over the next year. The company's 5-year yield on cost also stands at 4.82%, reflecting consistent return on initial investment.
The Sustainability Question: Payout Ratio and Profitability
To evaluate the sustainability of its dividends, examining Dow Inc's dividend payout ratio is essential. As of March 31, 2024, the payout ratio is 1.28, which may raise concerns about the long-term sustainability of these dividends. Additionally, Dow Inc's profitability rank is 6 out of 10, indicating fair profitability with net profit reported in 7 out of the past 10 years.
Growth Metrics: The Future Outlook
For dividend sustainability, robust growth metrics are crucial. Dow Inc's growth rank of 6 suggests a fair growth outlook. The company's revenue per share and 3-year revenue growth rate indicate a strong revenue model, though it underperforms 56.38% of global competitors. Additionally, the 3-year EPS growth rate and 5-year EBITDA growth rate further underscore the challenges and opportunities in sustaining its dividend payments.
In conclusion, while Dow Inc offers a robust dividend yield and has maintained a consistent payment history, investors should closely monitor its payout ratio, profitability, and growth metrics to gauge the future sustainability of dividends. For those looking to explore more high-dividend yield opportunities, GuruFocus Premium provides tools like the High Dividend Yield Screener to discover promising dividend stocks.
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.
