An In-depth Examination of Taylor Wimpey PLC's Dividend Performance and Sustainability
Taylor Wimpey PLC (TWODY, Financial) recently announced a dividend of $0.61 per share, payable on 2023-12-04, with the ex-dividend date set for 2023-10-12. 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 delve into Taylor Wimpey PLC's dividend performance and assess its sustainability.
What Does Taylor Wimpey PLC Do?
Established through the merger of George Wimpey and Taylor Woodrow in 2007, Taylor Wimpey is the U.K.'s second-largest residential property developer by revenue—or third-largest as judged by dwelling completions. The company is vertically integrated through the land development, construction, and sales and marketing segments of the residential property development value chain, aligning with the typical business model employed by U.K. homebuilders. Taylor Wimpey also operates a nascent homebuilding operation in Spain.
A Glimpse at Taylor Wimpey PLC's Dividend History
Since 2021, Taylor Wimpey PLC has maintained a consistent dividend payment record. Dividends are currently distributed bi-annually. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Taylor Wimpey PLC's Dividend Yield and Growth
As of today, Taylor Wimpey PLC currently has a 12-month trailing dividend yield of 7.92% and a 12-month forward dividend yield of 8.32%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Taylor Wimpey PLC's annual dividend growth rate was 6.20%. Based on Taylor Wimpey PLC's dividend yield and five-year growth rate, the 5-year yield on cost of Taylor Wimpey PLC stock as of today is approximately 7.92%.
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, Taylor Wimpey PLC's dividend payout ratio is 0.61.
Taylor Wimpey PLC's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Taylor Wimpey PLC's profitability 7 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported positive net income for each 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. Taylor Wimpey PLC'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 Taylor Wimpey PLC's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Taylor Wimpey PLC's revenue has increased by approximately -2.30% per year on average, a rate that underperforms than approximately 77.23% 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, Taylor Wimpey PLC's earnings increased by approximately -4.40% per year on average, a rate that underperforms than approximately 71.59% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -4.80%, which underperforms than approximately 73.91% of global competitors.
Conclusion
Overall, Taylor Wimpey PLC's consistent dividend payments, impressive dividend growth rate, and sustainable payout ratio make it an attractive option for dividend-focused investors. However, its growth metrics and profitability rank indicate a need for caution. While the company has a good profitability rank, its growth metrics underperform relative to global competitors. Therefore, investors should weigh these factors carefully before making investment decisions.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
