Assessing the Sustainability and Prospects of Siemens AG's Dividend
Siemens AG (SIEGY, Financial) recently announced a dividend of $2.56 per share, payable on 2024-02-20, with the ex-dividend date set for 2024-02-09. 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 Siemens AG's dividend performance and assess its sustainability.
What Does Siemens AG Do?
Siemens AG is a multi-industry company focused on the areas of automation, electrification, mobility, and healthcare. Its top three geographic regions—the United States, Germany, and China—contribute over half of group revenue. Siemens has a 75% investment in separately listed Siemens Healthineers. Recent portfolio activity included the listing of Siemens Energy, spinning out its power and gas and Siemens Gamesa business divisions in 2020.
A Glimpse at Siemens AG's Dividend History
Siemens AG has maintained a consistent dividend payment record since 1998. Dividends are currently distributed on a yearly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Siemens AG's Dividend Yield and Growth
As of today, Siemens AG currently has a 12-month trailing dividend yield of 2.52% and a 12-month forward dividend yield of 2.83%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Siemens AG's annual dividend growth rate was 2.90%. Extended to a five-year horizon, this rate decreased to 2.10% per year. And over the past decade, Siemens AG's annual dividends per share growth rate stands at 3.10%.
Based on Siemens AG's dividend yield and five-year growth rate, the 5-year yield on cost of Siemens AG stock as of today is approximately 2.80%.
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, Siemens AG's dividend payout ratio is 0.44.
Siemens AG's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Siemens AG's profitability 7 out of 10 as of 2023-09-30, 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
Siemens AG'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 Siemens AG's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Siemens AG's revenue has increased by approximately 12.80% per year on average, a rate that outperforms approximately 66.85% 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, Siemens AG's earnings increased by approximately 20.40% per year on average, a rate that outperforms approximately 62.57% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 0.60%, which outperforms approximately 32.38% of global competitors.
Next Steps
In conclusion, Siemens AG's dividend payments, dividend growth rate, payout ratio, profitability, and growth metrics all point towards a stable and potentially growing dividend in the future. The company's consistent track record, combined with its strategic positioning in various industries, supports the likelihood of continued dividend payments. Investors looking for a mix of income and growth potential may find Siemens AG an attractive option. With robust profitability and a commitment to innovation and expansion, Siemens AG appears well-equipped to navigate the dynamic global market landscape. Will Siemens AG continue to be a reliable source of dividends for value investors? Only time will tell, but the current indicators suggest a positive outlook.
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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.
