Understanding the Dividend Metrics and Growth Prospects of Sumitomo Electric Industries Ltd (SMTOF, Financial)
Sumitomo Electric Industries Ltd (SMTOF) recently announced a dividend of $25 per share, payable on 0000-00-00, 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 Sumitomo Electric Industries Ltd's dividend performance and assess its sustainability.
Company Overview: Sumitomo Electric Industries Ltd
Sumitomo Electric Industries Ltd manufactures and sells electric wires and cables, and other products. The company is engaged in diversified business activities supporting people's daily lives and industry through five business segments: Automotive, Infocommunications, Electronics, Environment and Energy, and Industrial Materials and Others. Most of its revenue is derived from Japan.
Sumitomo Electric Industries Ltd's Dividend History
Sumitomo Electric Industries Ltd has maintained a consistent dividend payment record since 2004. Dividends are currently distributed on a bi-annual basis.
Sumitomo Electric Industries Ltd's Dividend Yield and Growth
As of today, Sumitomo Electric Industries Ltd currently has a 12-month trailing dividend yield of 2.84% and a 12-month forward dividend yield of 2.98%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Sumitomo Electric Industries Ltd's annual dividend growth rate was 7.70%. Extended to a five-year horizon, this rate decreased to 0.90% per year. Over the past decade, Sumitomo Electric Industries Ltd's annual dividends per share growth rate stands at 8.10%.
Based on Sumitomo Electric Industries Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Sumitomo Electric Industries Ltd stock as of today is approximately 2.97%.
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, Sumitomo Electric Industries Ltd's dividend payout ratio is 0.41.
Sumitomo Electric Industries Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Sumitomo Electric Industries Ltd's profitability 7 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported positive net income for each of the years over the past decade, further solidifying its high profitability.
Sumitomo Electric Industries Ltd's Growth Metrics
To ensure the sustainability of dividends, a company must have robust growth metrics. Sumitomo Electric Industries Ltd'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 Sumitomo Electric Industries Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Sumitomo Electric Industries Ltd's revenue has increased by approximately 8.80% per year on average, a rate that outperforms than approximately 60.78% 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, Sumitomo Electric Industries Ltd's earnings increased by approximately 15.70% per year on average, a rate that outperforms than approximately 59.38% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -3.20%, which outperforms than approximately 34.35% of global competitors.
Conclusion
In conclusion, Sumitomo Electric Industries Ltd's consistent dividend payments, robust growth rate, and solid profitability make it a compelling consideration for dividend-focused investors. While the payout ratio and growth metrics suggest a sustainable dividend, investors should always consider the overall business health and market conditions before making investment decisions.
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