Assessing the Upcoming Dividend and Historical Performance of Rentokil Initial PLC
Rentokil Initial PLC (RTO, Financial) recently announced a dividend of $0.38 per share, payable on 2024-05-28, with the ex-dividend date set for 2024-04-04. 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 Rentokil Initial PLC's dividend performance and assess its sustainability.
What Does Rentokil Initial PLC Do?
Rentokil Initial is the largest global provider of route-based pest-control and commercial hygiene services, operating in 83 countries. The group also offers a range of specialist route-based services including office and commercial space plant care, property care, and workwear rentals. The group has a diverse client base that includes global food producers, hotel chains, industrial goods businesses, restaurants, and individual residential customers.
A Glimpse at Rentokil Initial PLC's Dividend History
Rentokil Initial PLC has maintained a consistent dividend payment record since 2021. Dividends are currently distributed on a bi-annual basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Rentokil Initial PLC's Dividend Yield and Growth
As of today, Rentokil Initial PLC currently has a 12-month trailing dividend yield of 1.65% and a 12-month forward dividend yield of 1.85%. This suggests an expectation of increased dividend payments over the next 12 months.
Based on Rentokil Initial PLC's dividend yield and five-year growth rate, the 5-year yield on cost of Rentokil Initial PLC stock as of today is approximately 1.65%.
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, Rentokil Initial PLC's dividend payout ratio is 0.34.
Rentokil Initial PLC's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Rentokil Initial PLC'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. Rentokil Initial PLC'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 Rentokil Initial PLC's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Rentokil Initial PLC's revenue has increased by approximately 12.20% per year on average, a rate that outperforms approximately 67.45% 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, Rentokil Initial PLC's earnings increased by approximately 14.70% per year on average, a rate that outperforms approximately 54.47% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 12.80%, which outperforms approximately 61.83% of global competitors.
Conclusion: Rentokil Initial PLC's Dividend Prospects
Considering Rentokil Initial PLC's consistent dividend history, a robust payout ratio, and favorable growth metrics, the company appears to be in a strong position to maintain its dividend payments. The forward-looking dividend yield indicates a positive outlook for dividend growth, supported by the company's solid profitability and revenue growth rates. Investors seeking dividend income might find Rentokil Initial PLC an attractive option, especially with the potential for dividend increases in line with the company's financial performance. For those looking to expand their income-generating portfolio, 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.
