Understanding TE Connectivity Ltd's Dividend Dynamics
TE Connectivity Ltd (TEL, Financial) recently announced a dividend of $0.59 per share, payable on 2024-03-01, with the ex-dividend date set for 2024-02-15. 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 TE Connectivity Ltd's dividend performance and assess its sustainability.
What Does TE Connectivity Ltd Do?
TE Connectivity is the largest electrical connector supplier in the world, supplying interconnect and sensor solutions to the transportation, industrial, and communications markets. With operations in 150 countries and over 500,000 stock-keeping units, TE has a broad portfolio that forms the electrical architecture of its end customers' cutting-edge innovations.
A Glimpse at TE Connectivity Ltd's Dividend History
TE Connectivity Ltd has maintained a consistent dividend payment record since 2007. Dividends are currently distributed on a quarterly basis. TE Connectivity Ltd has increased its dividend each year since 2007. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 17 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down TE Connectivity Ltd's Dividend Yield and Growth
As of today, TE Connectivity Ltd currently has a 12-month trailing dividend yield of 1.65% and a 12-month forward dividend yield of 1.67%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, TE Connectivity Ltd's annual dividend growth rate was 7.00%. Extended to a five-year horizon, this rate decreased to 6.20% per year. And over the past decade, TE Connectivity Ltd's annual dividends per share growth rate stands at 8.90%.
Based on TE Connectivity Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of TE Connectivity Ltd stock as of today is approximately 2.23%.
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 2023-12-31, TE Connectivity Ltd's dividend payout ratio is 0.33.
TE Connectivity Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks TE Connectivity Ltd's profitability 8 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported net profit in 9 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. TE Connectivity Ltd'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 TE Connectivity Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. TE Connectivity Ltd's revenue has increased by approximately 11.30% per year on average, a rate that outperforms approximately 69.87% 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, TE Connectivity Ltd's earnings increased by approximately 54.10% per year on average, a rate that outperforms approximately 86.22% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 4.30%, which outperforms approximately 35.37% of global competitors.
Concluding Insights on TE Connectivity Ltd's Dividends
TE Connectivity Ltd's consistent dividend payments, combined with a solid growth rate, favorable payout ratio, and strong profitability and growth metrics, position it as a potentially attractive option for value investors focused on dividend income. The company's track record of increasing dividends and its ability to sustain and grow its earnings power provide a reassuring sign for those looking for stability and growth in their investment portfolio. As the world continues to evolve with technological advancements, TE Connectivity Ltd's role as a key supplier in various industries may further bolster its financial health and, consequently, its ability to maintain a robust dividend policy.
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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.
