Unraveling the Dividend Story of Brambles Ltd (BXBLY)
An in-depth analysis of the company's dividend performance and sustainability
Brambles Ltd(BXBLY) recently announced a dividend of $0.28 per share, payable on 2023-10-19, with the ex-dividend date set for 2023-09-13. 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 deep dive into Brambles Ltd's dividend performance and assess its sustainability.
About Brambles Ltd
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Brambles is the world's largest supplier of reusable wooden pallets for the fast-moving consumer goods, fresh produce, beverage, retail, and general manufacturing industries. Bramble's services primarily operate under the Chep brand. Operations span approximately 60 countries with three geographical segments: Chep Americas, Chep EMEA, and Chep Asia-Pacific.
Tracing Brambles Ltd's Dividend History
Brambles Ltd has maintained a consistent dividend payment record since 2010. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Deciphering Brambles Ltd's Dividend Yield and Growth
As of today, Brambles Ltd currently has a 12-month trailing dividend yield of 2.34% and a 12-month forward dividend yield of 2.65%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Brambles Ltd's annual dividend growth rate was 10.40%. Extended to a five-year horizon, this rate decreased to 2.30% per year. And over the past decade, Brambles Ltd's annual dividends per share growth rate stands at 0.90%.
Based on Brambles Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Brambles Ltd stock as of today is approximately 2.62%.
Can Brambles Ltd Sustain Its Dividend Payments?
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 2023-06-30, Brambles Ltd's dividend payout ratio is 0.49.
Brambles Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Brambles Ltd's profitability 8 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Looking Ahead: Brambles Ltd's Growth Metrics
To ensure the sustainability of dividends, a company must have robust growth metrics. Brambles 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 Brambles Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Brambles Ltd's revenue has increased by approximately 13.70% per year on average, a rate that outperforms approximately 74.67% 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, Brambles Ltd's earnings increased by approximately 15.80% per year on average, a rate that outperforms approximately 56.3% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 4.10%, which outperforms approximately 39.4% of global competitors.
Final Thoughts
Given Brambles Ltd's consistent dividend payments, solid growth rate, and strong profitability, it appears well-positioned to sustain its dividends in the foreseeable future. However, investors should continue to monitor the company's performance and industry trends to make informed decisions. Remember, the best investment is an informed one.
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article first appeared on GuruFocus.
