A Comprehensive Analysis of the Company's Dividend History, Yield, Growth, and Sustainability
CCL Industries Inc(CCDBF, Financial) recently announced a dividend of $0.27 per share, payable on 2023-09-29, with the ex-dividend date set for 2023-09-14. 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 deep dive into CCL Industries Inc's dividend performance and assess its sustainability.
Understanding CCL Industries Inc's Business
CCL Industries Inc manufactures and sells packaging and packaging-related products. The company operates through various segments, which include The CCL segment, which generates the majority of revenue, sells pressure sensitive and extruded film materials used for labels on consumer packaging, healthcare, automotive, and consumer durable products. The Avery segment sells software, labels, tags, dividers, badges, and specialty card products under the Avery brand. The Checkpoint segment includes the manufacturing and selling of technology-driven, inventory management and labeling solutions. Innovia segment manufactures specialty films. Its geographical segments include Canada; USA and Puerto Rico; Mexico, Brazil, Chile and Argentina; Europe; and Asia, Australia, Africa and New Zealand.
Tracing CCL Industries Inc's Dividend History
CCL Industries Inc has maintained a consistent dividend payment record since 2003. Dividends are currently distributed on a quarterly basis. The following chart shows the annual Dividends Per Share for tracking historical trends.
Assessing CCL Industries Inc's Dividend Yield and Growth
As of today, CCL Industries Inc currently has a 12-month trailing dividend yield of 1.75% and a 12-month forward dividend yield of 1.84%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, CCL Industries Inc's annual dividend growth rate was 12.30%. Extended to a five-year horizon, this rate increased to 16.10% per year. And over the past decade, CCL Industries Inc's annual dividends per share growth rate stands at an impressive 21.60%.
Based on CCL Industries Inc's dividend yield and five-year growth rate, the 5-year yield on cost of CCL Industries Inc stock as of today is approximately 3.69%.
Dividend Sustainability: 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 2023-06-30, CCL Industries Inc's dividend payout ratio is 0.28.
CCL Industries Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks CCL Industries Inc's profitability 8 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: A Peek into the Future
To ensure the sustainability of dividends, a company must have robust growth metrics. CCL Industries Inc's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and CCL Industries Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. CCL Industries Inc's revenue has increased by approximately 6.20% per year on average, a rate that underperforms than approximately 54.42% 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, CCL Industries Inc's earnings increased by approximately 9.40% per year on average, a rate that underperforms than approximately 48.99% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 6.40%, which underperforms than approximately 54.37% of global competitors.
Concluding Thoughts
In conclusion, CCL Industries Inc presents a compelling case for investors seeking stable dividends. With a consistent dividend payment record, a solid growth rate, and a low payout ratio, the company demonstrates a sustainable dividend policy. Its profitability rank and growth metrics further underscore its potential. However, investors should also consider the company's relative underperformance in terms of revenue and EPS growth rate. As always, a prudent investment decision should balance these factors alongside the investor's individual financial goals and risk tolerance.
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