Exploring the Sustainability and Growth of Britvic PLC's Dividends
Britvic PLC (BTVCF, Financial) recently announced a dividend of $0.1 per share, payable on 2024-07-05, 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 Britvic PLC's dividend performance and assess its sustainability.
What Does Britvic PLC Do?
Britvic PLC manufactures and sells nonalcoholic beverages, predominantly in Great Britain, France, and Ireland. In Great Britain and Ireland, the company sells PepsiCo brands in addition to its own Britvic brands. Britvic brands include Robinsons, J2O, Tango, Fruit Shoot and others. In France, it sells its own brands, including Teisseire, as well as private-label juices and syrups. The company also has a small international business that sells in dozens of countries, including India, the United States, and Brazil, where Britvic bought the Ebba company and now owns the Maguary and Dafruta brands. Majority of the company's total revenue is from sales in Great Britain. Britvic predominantly distributes its products to supermarkets.
A Glimpse at Britvic PLC's Dividend History
Britvic PLC has maintained a consistent dividend payment record since 2009. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Britvic PLC's Dividend Yield and Growth
As of today, Britvic PLC currently has a 12-month trailing dividend yield of 3.75% and a 12-month forward dividend yield of 3.90%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Britvic PLC's annual dividend growth rate was 10.70%. Extended to a five-year horizon, this rate decreased to 0.90% per year. And over the past decade, Britvic PLC's annual dividends per share growth rate stands at 4.20%.
Based on Britvic PLC's dividend yield and five-year growth rate, the 5-year yield on cost of Britvic PLC stock as of today is approximately 3.92%.
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 2024-03-31, Britvic PLC's dividend payout ratio is 0.48.
Britvic PLC's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Britvic PLC's profitability 7 out of 10 as of 2024-03-31, suggesting good profitability prospects. 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. Britvic PLC's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Britvic PLC's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Britvic PLC's revenue has increased by approximately 8.50% per year on average, a rate that underperforms approximately 55.34% 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, Britvic PLC's earnings increased by approximately 12.10% per year on average, a rate that underperforms approximately 56.67% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 0.90%, which underperforms approximately 69.7% of global competitors.
Next Steps
In conclusion, while Britvic PLC demonstrates a strong dividend history with a promising yield, the company's growth metrics and profitability suggest a cautious outlook for future dividend sustainability. Investors should monitor the payout ratio and profitability closely, alongside the company's ability to maintain its revenue and earnings growth. 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.
