Assessing the Sustainability and Growth of Grupo Mexico SAB de CV's Dividends
Grupo Mexico SAB de CV(GMBXF, Financial) recently announced a dividend of $1 per share, payable on 2023-11-27, with the ex-dividend date set for 2023-11-22. 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 look into Grupo Mexico SAB de CVs dividend performance and assess its sustainability.
What Does Grupo Mexico SAB de CV Do?
Grupo Mexico SAB de CV is a holding company that operates in the mining-metallurgic industry, the exploration, exploitation, and benefit of metallic and non-metallic ores, multimodal freight railroad service, and infrastructure development. The majority of the group's revenue is generated by the mining division, through its subsidiary AMC. The company has 14 mines and exploration projects in Mexico, Peru, the United States of America, Chile, Ecuador, and Argentina, and its products include copper, molybdenum, silver, zinc, gold, and lead. The company also has a transportation division comprised of three large railroad companies through its subsidiary FM Rail Holding. Together, they form the largest railroad operator in Mexico, both in terms of coverage and fleet size.
A Glimpse at Grupo Mexico SAB de CV's Dividend History
Grupo Mexico SAB de CV has maintained a consistent dividend payment record since 2009. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Grupo Mexico SAB de CV's Dividend Yield and Growth
As of today, Grupo Mexico SAB de CV currently has a 12-month trailing dividend yield of 4.55% and a 12-month forward dividend yield of 5.23%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Grupo Mexico SAB de CV's annual dividend growth rate was 27.60%. Extended to a five-year horizon, this rate increased to 30.50% per year. And over the past decade, Grupo Mexico SAB de CV's annual dividends per share growth rate stands at an impressive 19.50%.
Based on Grupo Mexico SAB de CV's dividend yield and five-year growth rate, the 5-year yield on cost of Grupo Mexico SAB de CV stock as of today is approximately 17.22%.
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, Grupo Mexico SAB de CV's dividend payout ratio is 0.44.
Grupo Mexico SAB de CV's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Grupo Mexico SAB de CV's profitability 9 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. Grupo Mexico SAB de CV's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Grupo Mexico SAB de CV's revenue has increased by approximately 10.10% per year on average, a rate that underperforms than approximately 53.2% 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, Grupo Mexico SAB de CV's earnings increased by approximately 18.70% per year on average, a rate that underperforms than approximately 41.12% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 24.20%, which underperforms than approximately 29.49% of global competitors.
Next Steps
Considering Grupo Mexico SAB de CV's dividend payments, dividend growth rate, payout ratio, profitability, and growth metrics, the company presents a compelling case for investors seeking stable and growing dividends. The consistent dividend history, coupled with a reasonable payout ratio and strong profitability rank, suggests that the dividends are sustainable. However, investors should also consider the mixed performance in revenue and earnings growth relative to global competitors when evaluating the long-term growth potential of their investment. With the upcoming dividend payment, it's an opportune time to analyze how Grupo Mexico SAB de CV fits into a diversified investment portfolio.
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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.
