An in-depth look into the dividend history, yield, growth, and sustainability of Universal Music Group NV (UNVGY, Financial)
Universal Music Group NV (UNVGY) recently announced a dividend of $0.13 per share, payable on 2023-11-13, with the ex-dividend date set for 2023-10-04. 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 Universal Music Group NV's dividend performance and assess its sustainability.
A Brief Overview of Universal Music Group NV
Universal Music Group is the largest of the three major global record labels with Sony Music in second and Warner Music in third. Universal's larger segment, recorded music, consists of iconic labels like Interscope, Capitol Music, Decca, EMI, and Motown and popular artists such as Drake, Taylor Swift, J Balvin, and Luke Bryan. Universal Music Publishing Group owns and administers almost four million compositions and is the second-largest music publisher behind Sony. Universal Music was spun out of Vivendi in September 2021 with 60% distributed to Vivendi shareholders, 20% to Tencent, 10% to Pershing Square Capital, and 10% remaining at Vivendi.
Universal Music Group NV's Dividend History
Universal Music Group NV has maintained a consistent dividend payment record since 2022. Dividends are currently distributed on a bi-annually basis. Universal Music Group NV has increased its dividend each year since -. The stock is thus listed as a dividend king, an honor that is given to companies that have increased their dividend each year for at least the past 2023 years.
Below is a chart showing annual Dividends Per Share for tracking historical trends.
Universal Music Group NV's Dividend Yield and Growth
As of today, Universal Music Group NV currently has a 12-month trailing dividend yield of 2.04% and a 12-month forward dividend yield of 2.13%. This suggests an expectation of increased dividend payments over the next 12 months.
Based on Universal Music Group NV's dividend yield and five-year growth rate, the 5-year yield on cost of Universal Music Group NV stock as of today is approximately 2.04%.
Assessing 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, Universal Music Group NV's dividend payout ratio is 0.80. This may suggest that the company's dividend may not be sustainable.
Universal Music Group NV's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Universal Music Group NV's profitability 6 out of 10 as of 2023-06-30, suggesting fair profitability. The company has reported net profit in 5 years out of the past 10 years.
Universal Music Group NV's Growth Metrics
To ensure the sustainability of dividends, a company must have robust growth metrics. Universal Music Group NV'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 Universal Music Group NV's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Universal Music Group NV's revenue has increased by approximately 13.00% per year on average, a rate that outperforms approximately 81.46% 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, Universal Music Group NV's earnings increased by approximately -7.30% per year on average, a rate that outperforms approximately 36.03% of global competitors.
Conclusion
In conclusion, Universal Music Group NV has demonstrated a consistent dividend payment record, with expectations of increased payments over the next 12 months. However, its high dividend payout ratio may raise questions about the sustainability of future dividends. Despite this, the company's fair profitability and growth outlook, combined with its strong revenue model, suggest potential for sustained dividends in the future. As always, investors should continue to monitor these metrics to make informed investment decisions.
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