An In-depth Look at the Company's Dividend Performance and Sustainability
ASML Holding NV(ASML, Financial) recently announced a dividend of $1.53 per share, payable on 2023-11-10, with the ex-dividend date set for 2023-11-01. 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 ASML Holding NV's dividend performance and assess its sustainability.
What Does ASML Holding NV Do?
Founded in 1984 and based in the Netherlands, ASML is the market share leader in photolithography systems used in the manufacturing of semiconductors. Photolithography is the process in which a light source is used to expose circuit patterns from a photomask onto a semiconductor wafer. The latest technological advances in this segment allow chipmakers to continually increase the number of transistors on the same area of silicon, with lithography historically representing a meaningful portion of the cost of making cutting-edge chips. Chipmakers require next-generation EUV lithography tools to continue past the 5-nanometer process node, which only ASML can provide. ASML's products are used at every major semiconductor manufacturer, including Intel, Samsung, and TSMC.
A Glimpse at ASML Holding NV's Dividend History
ASML Holding NV has maintained a consistent dividend payment record since 2007. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down ASML Holding NV's Dividend Yield and Growth
As of today, ASML Holding NV currently has a 12-month trailing dividend yield of 1.06% and a 12-month forward dividend yield of 1.09%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, ASML Holding NV's annual dividend growth rate was 26.90%. Extended to a five-year horizon, this rate increased to 36.20% per year. And over the past decade, ASML Holding NV's annual dividends per share growth rate stands at an impressive 27.70%.
Based on ASML Holding NV's dividend yield and five-year growth rate, the 5-year yield on cost of ASML Holding NV stock as of today is approximately 4.97%.
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 2023-09-30, ASML Holding NV's dividend payout ratio is 0.30.
ASML Holding NV's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks ASML Holding NV's profitability 10 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported positive net income for each of 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. ASML Holding NV's growth rank of 10 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and ASML Holding NV's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. ASML Holding NV's revenue has increased by approximately 23.80% per year on average, a rate that outperforms than approximately 74.6% 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, ASML Holding NV's earnings increased by approximately 32.00% per year on average, a rate that outperforms than approximately 55.86% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 26.80%, which outperforms than approximately 63.62% of global competitors.
Next Steps
In conclusion, ASML Holding NV's consistent dividend payments, impressive dividend growth rate, prudent payout ratio, and strong profitability and growth metrics make it a compelling consideration for dividend-focused investors. As the company continues to grow and maintain its profitability, it is poised to sustain its dividends in the long run. However, as with any investment, it's essential to conduct thorough research and consider the company's overall financial health before making an investment 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.
