Understanding the Dividend Dynamics of ChampionX Corp
ChampionX Corp (CHX, Financial) recently announced a dividend of $0.09 per share, payable on 2024-01-26, with the ex-dividend date set for 2024-01-04. 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 ChampionX Corp's dividend performance and assess its sustainability.
What Does ChampionX Corp Do?
ChampionX provides chemical solutions and equipment for onshore and offshore oil and gas production. Its engineering expertise spans the well life cycle, but the firm maintains a particular focus on the production phase. Key offerings include artificial lift services and drilling technologies, specializing in polycrystalline diamond cutter inserts. ChampionX was formed after Apergy acquired its chemical technologies business from Ecolab in 2020.
A Glimpse at ChampionX Corp's Dividend History
ChampionX Corp has maintained a consistent dividend payment record since 2022. Dividends are currently distributed on a quarterly basis.
ChampionX Corp has increased its dividend each year since -. The stock is thus listed as a dividend king, an honor that is given to companies that have increased their dividend each year for at least the past 2024 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down ChampionX Corp's Dividend Yield and Growth
As of today, ChampionX Corp currently has a 12-month trailing dividend yield of 1.10% and a 12-month forward dividend yield of 1.14%. This suggests an expectation of increased dividend payments over the next 12 months.
Based on ChampionX Corp's dividend yield and five-year growth rate, the 5-year yield on cost of ChampionX Corp stock as of today is approximately 1.10%.
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, ChampionX Corp's dividend payout ratio is 0.22.
ChampionX Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks ChampionX Corp's profitability 6 out of 10 as of 2023-09-30, suggesting fair profitability. The company has reported net profit in 6 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. ChampionX Corp's growth rank of 6 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and ChampionX Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. ChampionX Corp's revenue has increased by approximately 8.00% per year on average, a rate that underperforms approximately 56.43% 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, ChampionX Corp's earnings increased by approximately 12.10% per year on average, a rate that underperforms approximately 59.7% of global competitors.
Concluding Thoughts on ChampionX Corp's Dividend Profile
In conclusion, ChampionX Corp's consistent dividend payments, modest growth in dividend rates, and a prudent payout ratio reflect a balanced approach to shareholder returns. While the profitability and growth metrics present a mixed picture, the company's commitment to maintaining and potentially increasing dividends is evident. Investors should weigh these factors along with broader industry trends and ChampionX Corp's strategic initiatives when considering the stock for their portfolios. Will ChampionX Corp continue to uphold its dividend king status in the volatile energy sector? Only time will tell, but for now, the dividends seem to be on a stable footing.
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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.
