Assessing the Sustainability and Growth of Metso Corp's Dividend
Metso Corp(OUKPY, Financial) recently announced a dividend of $0.08 per share, payable on 2023-11-21, with the ex-dividend date set for 2023-10-27. 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 Metso Corp's dividend performance and assess its sustainability.
What Does Metso Corp Do?
Metso Corp is a Finnish company that offers solutions in the aggregates, mining, and metals businesses. The company operates in three reportable segments: aggregates, minerals, and metals. It provides its customers with crushing and screening equipment for the production of aggregates. The minerals segment offers equipment and full plant solutions for minerals processing, covering comminution, separation, and pumps. The metals segment provides processing solutions and equipment for metal refining and chemical processes.
A Glimpse at Metso Corp's Dividend History
Since 2020, Metso Corp has maintained a consistent dividend payment record, with dividends currently distributed bi-annually. The chart below shows the annual Dividends Per Share for tracking historical trends.
Breaking Down Metso Corp's Dividend Yield and Growth
As of today, Metso Corp has a 12-month trailing dividend yield of 2.99% and a 12-month forward dividend yield of 3.33%. This suggests an expectation of increased dividend payments over the next 12 months. Based on Metso Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Metso Corp stock as of today is approximately 2.99%.
The Sustainability Question: Payout Ratio and Profitability
The sustainability of the 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, Metso Corp's dividend payout ratio is 0.40.
Metso Corp's profitability rank of 6 out of 10, as of 2023-06-30, suggests fair profitability. The company has reported net profit in 7 out of the past 10 years.
Growth Metrics: The Future Outlook
For dividends to be sustainable, a company must have robust growth metrics. Metso Corp's growth rank of 6 out of 10 suggests a fair growth outlook. The company's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Metso Corp's revenue has increased by approximately 13.60% per year on average, a rate that outperforms approximately 71.92% 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, Metso Corp's earnings increased by approximately 6.00% per year on average, a rate that outperforms approximately 38.99% of global competitors.
Conclusion
Considering Metso Corp's consistent dividend payments, fair dividend growth rate, reasonable payout ratio, and decent profitability and growth metrics, it appears that the company's dividends are sustainable. However, as with any investment, potential investors should conduct thorough research and consider other factors before making a decision. GuruFocus Premium users can screen for high-dividend yield stocks using the 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.
