An In-depth Look at FTTRF's Dividend Performance, Growth, and Sustainability
Forterra PLC (FTTRF, Financial) recently announced a dividend of $0.02 per share, payable on 2023-10-13, with the ex-dividend date set for 2023-09-21. As investors eagerly await this upcoming payment, it's crucial to examine the company's dividend history, yield, and growth rates. Leveraging the robust data from GuruFocus, let's delve into Forterra PLC's dividend performance and gauge its sustainability.
Introduction to Forterra PLC
Forterra PLC operates in the construction industry, manufacturing and selling bricks, dense and lightweight blocks, precast concrete, concrete block paving, and other complementary building products. The company's revenue is primarily driven by its Bricks, Blocks, and Bespoke Products segments. The Bespoke Products range includes precast concrete, concrete block paving, chimney, and roofing solutions.
Forterra PLC's Dividend History
Since 2021, Forterra PLC has maintained a consistent dividend payment record, distributing dividends on a bi-annual basis. The chart below depicts the annual Dividends Per Share, providing a historical perspective on the company's dividend trends.
Understanding Forterra PLC's Dividend Yield and Growth
As it stands, Forterra PLC boasts a 12-month trailing dividend yield of 7.92% and a 12-month forward dividend yield of 7.00%. This suggests a potential decrease in dividend payments over the next 12 months. Despite this, Forterra PLC's dividend yield, near a 10-year high, outperforms 92.5% of global competitors in the Building Materials industry, making it an attractive proposition for income investors.
Over the past three years, Forterra PLC's annual dividend growth rate was 0.30%. Based on the company's dividend yield and five-year growth rate, the 5-year yield on cost of Forterra PLC stock is approximately 7.92%.
Assessing Dividend Sustainability: Payout Ratio and Profitability
The sustainability of a dividend can be evaluated by examining the company's payout ratio. The dividend payout ratio of Forterra PLC, as of 2023-06-30, stands at 0.84. This high ratio may raise concerns about the sustainability of the company's dividends. However, with a profitability rank of 7 out of 10, the company's earnings prowess relative to its peers is commendable, which could offset these concerns.
Future Growth Prospects
Robust growth metrics are crucial for the sustainability of dividends. With a growth rank of 7 out of 10, Forterra PLC's growth trajectory appears promising. However, the company's revenue and EPS growth rates, which underperform approximately 56.9% and 51.17% of global competitors respectively, indicate there may be room for improvement.
Conclusion
Overall, while Forterra PLC's high dividend yield and consistent payment record may appeal to income investors, the sustainability of these dividends is a point of concern due to the high payout ratio. The company's strong profitability and growth rank offer some reassurance, but the underperformance in revenue and EPS growth rates suggest the need for a careful evaluation before making investment decisions. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
