Assessing the Sustainability and Growth of EQT AB's Dividends
EQT AB (EQBBF, Financial) recently announced a dividend of $1.5 per share, payable on 2023-12-05, with the ex-dividend date set for 2023-11-29. 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 EQT AB's dividend performance and assess its sustainability.
What Does EQT AB Do?
EQT AB is an investment management company. The company manages and advises investment funds and other investment units investing worldwide with the goal of creating attractive returns and future-proof companies. It has two business segments namely, Private Capital (Trades, Portfolio) and Real Assets. It generates maximum revenue from the Private Capital (Trades, Portfolio) segment. Geographically, it has a presence in Germany; Norway; Denmark; Netherlands; Singapore, and other countries.
A Glimpse at EQT AB's Dividend History
EQT AB has maintained a consistent dividend payment record since 2020. Dividends are currently distributed on a bi-annual basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down EQT AB's Dividend Yield and Growth
As of today, EQT AB currently has a 12-month trailing dividend yield of 1.33% and a 12-month forward dividend yield of 1.41%. This suggests an expectation of increased dividend payments over the next 12 months. Based on EQT AB's dividend yield and five-year growth rate, the 5-year yield on cost of EQT AB stock as of today is approximately 1.33%.
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, EQT AB's dividend payout ratio is 0.00, indicating that the current value is not applicable, possibly due to an absence of earnings or a unique financial structure.
EQT AB's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks EQT AB's profitability 8 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported net profit in 7 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. EQT AB's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Revenue is the lifeblood of any company, and EQT AB's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. EQT AB's revenue has increased by approximately 31.90% per year on average, a rate that outperforms approximately 80.22% 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, EQT AB's earnings increased by approximately 40.90% per year on average, a rate that outperforms approximately 82.26% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 58.00%, which outperforms approximately 95.53% of global competitors.
Next Steps
In conclusion, while EQT AB's current dividend payout ratio is not applicable, the company's strong profitability and growth metrics present a positive outlook for dividend sustainability and potential growth. The consistent dividend history and the expectation of increased dividend payments suggest confidence in EQT AB's financial health and commitment to shareholder returns. Investors considering EQT AB for its dividend prospects should also factor in the company's competitive position, strategic initiatives, and industry trends. With robust revenue and earnings growth rates outperforming a significant portion of global competitors, EQT AB appears well-positioned to continue its dividend payments. Will EQT AB continue to reward investors with growing dividends, and how will the company's strategic decisions influence future payouts? These are critical considerations for value investors seeking informed financial 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.
