Assessing the Sustainability of BDO Unibank Inc's Dividend Payouts
BDO Unibank Inc (BDOUY, Financial) recently announced a dividend of $0.13 per share, payable on 2024-04-03, with the ex-dividend date set for 2024-03-11. 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 BDO Unibank Inc's dividend performance and assess its sustainability.
What Does BDO Unibank Inc Do?
BDO Unibank Inc is a full-service universal bank in the Philippines. The company provides a variety of banking products and services, including corporate and consumer lending, deposit-taking, foreign exchange, brokering, trust and investments, credit cards, corporate cash management, and remittances. It also offers leasing and financing, investment banking, private banking, rural banking, bancassurance, and insurance and stock brokerage services through its various local subsidiaries. It has a large distribution network of operating branches and ATMs. Most of its earning assets are loans and other receivables.
A Glimpse at BDO Unibank Inc's Dividend History
BDO Unibank Inc has maintained a consistent dividend payment record since 2015. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down BDO Unibank Inc's Dividend Yield and Growth
As of today, BDO Unibank Inc currently has a 12-month trailing dividend yield of 17.29% and a 12-month forward dividend yield of 1.91%. This suggests an expectation of decreased dividend payments over the next 12 months. BDO Unibank Inc's dividend yield of 17.29% is near a 10-year high and outperforms 95.5% of global competitors in the Banks industry, suggesting that the company's dividend yield stands out as an attractive proposition for income investors.
Over the past three years, BDO Unibank Inc's annual dividend growth rate was 1.60%. Extended to a five-year horizon, this rate decreased to 0.70% per year. Based on BDO Unibank Inc's dividend yield and five-year growth rate, the 5-year yield on cost of BDO Unibank Inc stock as of today is approximately 17.90%.
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, BDO Unibank Inc's dividend payout ratio is 2.01, which may suggest that the company's dividend may not be sustainable.
BDO Unibank Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks BDO Unibank Inc's profitability 7 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported positive net income for each of 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. BDO Unibank Inc'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 BDO Unibank Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. BDO Unibank Inc's revenue has increased by approximately 6.80% per year on average, a rate that underperforms approximately 50.93% 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, BDO Unibank Inc's earnings increased by approximately 9.00% per year on average, a rate that underperforms approximately 56.69% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 11.80%, which underperforms approximately 38.61% of global competitors.
Next Steps
In conclusion, while BDO Unibank Inc's dividend yield is currently attractive, the sustainability of its dividends may be a concern due to a high payout ratio and mixed performance in growth metrics. Investors should consider the company's ability to maintain its dividend payments in the context of its dividend growth rate, payout ratio, profitability, and growth metrics. With a profitability rank that suggests good prospects and a commitment to consistent dividend payments, BDO Unibank Inc could be a consideration for income-focused portfolios. However, careful analysis of the company's future growth potential and financial stability is essential. For those seeking dividend-paying stocks, GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
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.
