Unpacking the Dividend Performance and Future Prospects of Arcos Dorados Holdings Inc
Arcos Dorados Holdings Inc (ARCO, Financial) recently announced a dividend of $0.05 per share, payable on 2023-09-28, with the ex-dividend date set for 2023-09-22. 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 Arcos Dorados Holdings Inc's dividend performance and assess its sustainability.
Company Overview: Arcos Dorados Holdings Inc
Arcos Dorados Holdings Inc operates McDonald's-branded restaurants in approximately 20 countries and territories in Latin America and the Caribbean. It functions through two sources which include company-operated restaurants and franchised restaurants segment. Their menu includes hamburgers, McNuggets, salad, sandwiches, french fries and others.
Historical Dividend Performance of Arcos Dorados Holdings Inc
Arcos Dorados Holdings Inc has maintained a consistent dividend payment record since 2022. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Dividend Yield and Growth: A Closer Look
As of today, Arcos Dorados Holdings Inc currently has a 12-month trailing dividend yield of 1.74% and a 12-month forward dividend yield of 1.61%. This suggests an expectation of decrease dividend payments over the next 12 months.
Over the past three years, Arcos Dorados Holdings Inc's annual dividend growth rate was 11.90%. Based on Arcos Dorados Holdings Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Arcos Dorados Holdings Inc stock as of today is approximately 1.74%.
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, Arcos Dorados Holdings Inc's dividend payout ratio is 0.22.
Arcos Dorados Holdings Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Arcos Dorados Holdings Inc's profitability 6 out of 10 as of 2023-06-30, suggesting fair profitability. The company has reported net profit in 7 years out of past 10 years.
Future Growth Prospects of Arcos Dorados Holdings Inc
To ensure the sustainability of dividends, a company must have robust growth metrics. Arcos Dorados Holdings Inc's growth rank of 6 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and Arcos Dorados Holdings Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Arcos Dorados Holdings Inc's revenue has increased by approximately 6.40% per year on average, a rate that outperforms than approximately 73.33% 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, Arcos Dorados Holdings Inc's earnings increased by approximately 20.80% per year on average, a rate that outperforms than approximately 68.56% of global competitors.
Concluding Thoughts: Arcos Dorados Holdings Inc's Dividend Performance
Based on the analysis above, Arcos Dorados Holdings Inc has demonstrated a consistent dividend payment record, a fair growth outlook, and robust earnings capability. The company's payout ratio and profitability rank further underscore the sustainability of its dividends. However, investors should continue to monitor the company's growth metrics and earnings performance to ensure the sustainability of future dividends.
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