Assessing the Sustainability of Albertsons Companies Inc's Dividend Payments
Albertsons Companies Inc (ACI, Financial) recently announced a dividend of $0.12 per share, payable on 2024-02-09, with the ex-dividend date set for 2024-01-25. 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 Albertsons Companies Inc's dividend performance and assess its sustainability.
What Does Albertsons Companies Inc Do?
Albertsons Companies Inc is the second-largest conventional grocer in America, operating 2,271 stores under 24 banners in 34 states (as of the end of fiscal 2022). Around 75% of stores have pharmacies, while nearly 20% also sell fuel. Albertsons has a significant private-label operation, accounting for around 25% of sales (excluding fuel). While its own brand assortment is mainly manufactured by third parties, Albertsons operates 19 food production plants (as of the end of fiscal 2022). Albertsons is a top two grocer in two thirds of its major markets (as of early 2022, according to company data), and virtually all of its sales come from the United States. Narrow-moat Kroger has offered to acquire Albertsons in a $25 billion deal; if the transaction is approved by regulators, it should close in 2024.
A Glimpse at Albertsons Companies Inc's Dividend History
Albertsons Companies Inc has maintained a consistent dividend payment record since 2020, with dividends currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Albertsons Companies Inc's Dividend Yield and Growth
As of today, Albertsons Companies Inc currently has a 12-month trailing dividend yield of 2.20% and a 12-month forward dividend yield of 2.20%. This suggests an expectation of the same dividend payments over the next 12 months.
Based on Albertsons Companies Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Albertsons Companies Inc stock as of today is approximately 2.20%.
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 2023-11-30, Albertsons Companies Inc's dividend payout ratio is 0.20.
Albertsons Companies Inc's profitability rank, at 6 out of 10 as of 2023-11-30, suggests fair profitability, with the company reporting net profit in 7 years out of the past 10 years.
Growth Metrics: The Future Outlook
Albertsons Companies Inc's growth rank of 6 out of 10 suggests that the company has a fair growth outlook. Its revenue per share and the 3-year revenue growth rate indicate a strong revenue model, with revenue increasing by approximately 10.60% per year on average, outperforming approximately 71.13% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, critical for sustaining dividends, with earnings increasing by approximately 48.00% per year on average, outperforming approximately 87.35% of global competitors. Furthermore, the company's 5-year EBITDA growth rate of 111.30% outperforms approximately 99.42% of global competitors.
Next Steps
In conclusion, Albertsons Companies Inc's upcoming dividend payment, consistent dividend history, and solid growth metrics paint a picture of a potentially sustainable income stream for investors. The company's reasonable payout ratio and fair profitability rank further bolster confidence in its ability to maintain its dividend payments. With the prospect of the Kroger acquisition looming, investors may also want to consider the potential impacts on future dividend policies. For those seeking to expand their portfolio with high-dividend yield stocks, GuruFocus Premium users can utilize the High Dividend Yield Screener for informed investment decisions.
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.
