Exploring the Dividend History, Yield, and Sustainability of Amdocs Ltd (DOX, Financial)
Amdocs Ltd(DOX) recently announced a dividend of $0.44 per share, payable on 2023-10-27, with the ex-dividend date set for 2023-09-28. 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 Amdocs Ltd's dividend performance and assess its sustainability.
Company Overview: Amdocs Ltd
Amdocs Ltd is a provider of software and services to communications, cable and satellite, entertainment, and media industry service providers. Its only segment being designed, develop, market, support, implement, and operate its open and modular cloud offering. The company offers business support systems, operational support systems, and managed services. Amdocs also develops software for mobile financial services and advertising and media solutions. Geographically, it derives a majority of revenue from North America and also has a presence in Europe and the Rest of the world.
A Glimpse at Amdocs Ltd's Dividend History
Amdocs Ltd has maintained a consistent dividend payment record since 2012. Dividends are currently distributed on a quarterly basis. Amdocs Ltd has increased its dividend each year since 2012. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 11 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Amdocs Ltd's Dividend Yield and Growth
As of today, Amdocs Ltd currently has a 12-month trailing dividend yield of 1.93% and a 12-month forward dividend yield of 2.03%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Amdocs Ltd's annual dividend growth rate was 11.80%. Extended to a five-year horizon, this rate increased to 12.80% per year. And over the past decade, Amdocs Ltd's annual dividends per share growth rate stands at an impressive 19.80%.
Based on Amdocs Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Amdocs Ltd stock as of today is approximately 3.52%.
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 2023-06-30, Amdocs Ltd's dividend payout ratio is 0.36.
Amdocs Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Amdocs Ltd's profitability 9 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: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Amdocs Ltd's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Amdocs Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Amdocs Ltd's revenue has increased by approximately 8.00% per year on average, a rate that underperforms than approximately 50.21% 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, Amdocs Ltd's earnings increased by approximately 8.60% per year on average, a rate that underperforms than approximately 51.84% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 13.40%, which underperforms than approximately 46.04% of global competitors.
Concluding Remarks
Given Amdocs Ltd's consistent dividend payments, impressive growth rate, reasonable payout ratio, and strong profitability, it appears that the company's dividend is sustainable over the long run. However, the company's growth metrics indicate a mixed performance relative to global competitors. Therefore, investors should keep a close eye on these factors when considering Amdocs Ltd for their portfolio.
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
