Exploring the Sustainability and Growth of Dividends
NIBE Industrier AB (NDRBF, Financial) recently announced a dividend of $0.65 per share, payable on 2024-05-23, with the ex-dividend date set for 2024-05-17. 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 NIBE Industrier AB's dividend performance and assess its sustainability.
What Does NIBE Industrier AB Do?
NIBE Industrier AB manufactures and sells energy-efficient products for industrial and consumer use. The firm is organized into three segments by product type. The climate solutions segment, which generates the majority of revenue, sells HVAC systems and hot water heaters to homes, apartment buildings, and other large properties. The elements segment sells components and elements to multiple industries, including appliance manufacturers, home remodelers, energy, and automotive. The stoves segment sells energy-efficient stoves and chimney systems to residential and commercial customers. The vast majority of revenue comes from Europe.
A Glimpse at NIBE Industrier AB's Dividend History
NIBE Industrier AB has maintained a consistent dividend payment record since 2019. Dividends are currently distributed on a yearly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down NIBE Industrier AB's Dividend Yield and Growth
As of today, NIBE Industrier AB currently has a 12-month trailing dividend yield of 1.09% and a 12-month forward dividend yield of 1.10%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, NIBE Industrier AB's annual dividend growth rate was 22.90%. Extended to a five-year horizon, this rate decreased to 18.40% per year. And over the past decade, NIBE Industrier AB's annual dividends per share growth rate stands at an impressive 17.50%.
Based on NIBE Industrier AB's dividend yield and five-year growth rate, the 5-year yield on cost of NIBE Industrier AB stock as of today is approximately 2.54%.
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, NIBE Industrier AB's dividend payout ratio is 0.27. NIBE Industrier AB's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks NIBE Industrier AB's profitability 9 out of 10 as of 2023-12-31, 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
To ensure the sustainability of dividends, a company must have robust growth metrics. NIBE Industrier AB's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Revenue is the lifeblood of any company, and NIBE Industrier AB's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. NIBE Industrier AB's revenue has increased by approximately 19.80% per year on average, a rate that outperforms approximately 82.14% 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, NIBE Industrier AB's earnings increased by approximately 22.00% per year on average, a rate that outperforms approximately 68.22% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 19.70%, which outperforms approximately 77.16% of global competitors.
Conclusion
Given NIBE Industrier AB's consistent dividend payments, robust dividend growth rate, sustainable payout ratio, strong profitability, and solid growth metrics, the company presents a compelling case for value investors seeking dividend income. The combination of these factors suggests that NIBE Industrier AB is well-positioned to maintain its dividend payments and possibly increase them in the future. For those looking to explore further, 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.
