An In-depth Look at ITV PLC's Dividend Performance and Sustainability
ITV PLC (ITVPY, Financial) recently announced a dividend of $0.21 per share, payable on 2023-12-13, with the ex-dividend date set for 2023-10-19. 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 ITV PLC's dividend performance and assess its sustainability.
Company Overview: ITV PLC
ITV PLC is a broadcasting television company that owns, creates, and distributes content on its platforms. The company's international content business, ITV Studios, produces programming for ITV's channels as well as other British broadcasters. The company's segments include ITV Studios and Media and Entertainment, with the latter generating maximum revenue.
Tracing ITV PLC's Dividend History
Since 2022, ITV PLC has maintained a consistent dividend payment record, distributing dividends bi-annually. The chart below shows the annual Dividends Per Share for tracking historical trends.
Breaking Down ITV PLC's Dividend Yield and Growth
As of today, ITV PLC has a 12-month trailing dividend yield of 7.35% and a 12-month forward dividend yield of 7.47%. This suggests an expectation of increased dividend payments over the next 12 months. However, over the past three years, ITV PLC's annual dividend growth rate was -14.50%. Based on ITV PLC's dividend yield and five-year growth rate, the 5-year yield on cost of ITV PLC stock as of today is approximately 7.35%.
Is ITV PLC's Dividend Sustainable?
The sustainability of ITV PLC's dividend can be assessed by evaluating 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, ensuring the availability of funds for future growth and unexpected downturns. As of 2023-06-30, ITV PLC's dividend payout ratio is 0.74, which may suggest that the company's dividend may not be sustainable. ITV PLC's profitability rank of 8 out of 10, as of 2023-06-30, suggests good profitability prospects. The company has reported positive net income each year over the past decade, further solidifying its high profitability.
ITV PLC's Growth Metrics: A Look into the Future
For the sustainability of dividends, a company must have robust growth metrics. ITV PLC's growth rank of 8 out of 10 suggests a good growth trajectory relative to its competitors. ITV PLC's revenue has increased by approximately 3.80% per year on average, a rate that outperforms approximately 61.89% 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, ITV PLC's earnings increased by approximately -3.50% per year on average, a rate that outperforms approximately 38.27% of global competitors. Lastly, the company's 5-year EBITDA growth rate of -2.80% outperforms approximately 33.71% of global competitors.
Conclusion
Despite a negative dividend growth rate over the past three years and a high payout ratio, ITV PLC has demonstrated strong profitability and growth metrics. The company's robust revenue growth and positive net income over the past decade suggest potential for future earnings growth and dividend sustainability. However, investors should continue to monitor ITV PLC's payout ratio and growth metrics to ensure continued dividend sustainability. For high-dividend yield stocks, consider using GuruFocus's High Dividend Yield Screener.
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.
