Unveiling Tosoh Corp's Dividend Dynamics: A Comprehensive Analysis
Exploring the Dividend Performance and Sustainability of Tosoh Corp (TOSCF)
Tosoh Corp(TOSCF) recently announced a dividend of $40 per share, payable on a date yet to be announced, with the ex-dividend date set for 2023-09-29. As investors eagerly anticipate this upcoming payment, it's crucial to examine the company's dividend history, yield, and growth rates. Using the comprehensive data from GuruFocus, let's delve into Tosoh Corp's dividend performance and assess its sustainability.
Understanding Tosoh Corp's Business Model
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Tosoh Corp manufactures and sells a diverse range of petrochemicals, plastics, and chemical-based products. The firm organizes itself into four segments, based on product type. The Petrochemical segment, which generates more revenue than any other segment, sells olefins and polymers, including ethylene and polyvinyl chloride, which are used to make plastics for a variety of end uses. The Chlor-Alkali segment sells caustic soda used to make soap, baking soda, and water treatment products. The Specialty segment sells battery materials, a variety of zirconia products, bromine used in electronics flame retardants, and clinical diagnostics equipment. The Engineering segment provides construction and water treatment services. The majority of revenue comes from Japan.
Tracing Tosoh Corp's Dividend History
Tosoh Corp has maintained a consistent dividend payment record since 2012, with dividends currently distributed bi-annually. The chart below shows the annual Dividends Per Share for tracking historical trends.
Dissecting Tosoh Corp's Dividend Yield and Growth
As of today, Tosoh Corp currently has a 12-month trailing dividend yield of 4.40% and a 12-month forward dividend yield of 4.48%, suggesting an expectation of increased dividend payments over the next 12 months.
Over the past three years, Tosoh Corp's annual dividend growth rate was 12.60%. Extended to a five-year horizon, this rate decreased to 12.30% per year. However, over the past decade, Tosoh Corp's annual dividends per share growth rate stands at an impressive 22.60%.
Based on Tosoh Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Tosoh Corp stock as of today is approximately 7.86%.
Assessing Dividend Sustainability: 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 2023-06-30, Tosoh Corp's dividend payout ratio is 0.73, which may suggest that the company's dividend may not be sustainable.
Tosoh Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Tosoh Corp's profitability 7 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.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Tosoh Corp'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 Tosoh Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Tosoh Corp's revenue has increased by approximately 11.40% per year on average, a rate that outperforms approximately 56.25% 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, Tosoh Corp's earnings increased by approximately -2.60% per year on average, a rate that outperforms approximately 28.42% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -4.40%, outperforms approximately 20.06% of global competitors.
Concluding Remarks
Overall, Tosoh Corp's dividend payments, growth rate, and payout ratio, combined with its profitability and growth metrics, paint a complex picture of the company's dividend performance. While the company's impressive dividend growth and profitability rank are positive signs, the sustainability of its dividends is called into question by its payout ratio. Therefore, investors should conduct further analysis and consider these factors carefully before making investment decisions.
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This article first appeared on GuruFocus.
