Understanding Thales's Upcoming Dividend and Its Historical Performance
Thales (THLLY, Financial) recently announced a dividend of $0.17 per share, payable on 2023-12-21, with the ex-dividend date set for 2023-12-01. 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 look into Thales's dividend performance and assess its sustainability.
What Does Thales Do?
Thales is a French aerospace and defense industrial and one of Europe's largest defense contractors with EUR 18 billion in sales. The company has three reportable segments: 1) Defense & Security provides sensors, mission systems, communications, and control systems to European and export defense customers; 2) Aerospace sells avionics and satellites to the civil, defense, and governmental markets; and 3) Digital identity and security provides biometric, data & identity security solutions, payments services, and the manufacturing of SIM cards.
A Glimpse at Thales's Dividend History
Thales has maintained a consistent dividend payment record since 2018. Dividends are currently distributed on a bi-annual basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Thales's Dividend Yield and Growth
As of today, Thales currently has a 12-month trailing dividend yield of 2.10% and a 12-month forward dividend yield of 2.19%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Thales's annual dividend growth rate was 6.90%. Extended to a five-year horizon, this rate decreased to 2.70% per year. And over the past decade, Thales's annual dividends per share growth rate stands at 7.10%.
Based on Thales's dividend yield and five-year growth rate, the 5-year yield on cost of Thales stock as of today is approximately 2.40%.
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, Thales's dividend payout ratio is 0.53.
Thales's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Thales's profitability 7 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported positive net income for each 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. Thales's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Thales's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Thales's revenue has increased by approximately -1.40% per year on average, a rate that underperforms approximately 61.65% 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, Thales's earnings increased by approximately 4.80% per year on average, a rate that underperforms approximately 48.4% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 3.80%, which underperforms approximately 56.35% of global competitors.
Concluding Insights on Thales's Dividend Prospects
In summary, Thales's upcoming dividend, historical dividend stability, and growth indicators present a mixed picture for investors. The company's consistent dividend history and reasonable payout ratio suggest a sustainable dividend policy. However, the growth metrics, particularly the revenue and earnings growth rates, indicate some challenges that could affect future dividend increases. Thales's solid profitability rank and yield on cost offer a positive note, but investors should also consider the company's underperformance in growth compared to industry peers. As Thales navigates the complexities of the aerospace and defense sector, investors may want to keep an eye on these factors when evaluating the company's long-term dividend potential.
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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.
