Yahoo Finance Sika AG's Dividend Analysis
Assessing the Sustainability and Growth of Sika AG's Dividends
Sika AG(SXYAY) recently announced a dividend of $0.35 per share, payable on 2024-04-18, with the ex-dividend date set for 2024-04-01. 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 Sika AG's dividend performance and assess its sustainability.
What Does Sika AG Do?
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Sika AG manufactures and sells specialty chemical-based products. The majority of the company's revenue comes from the construction industry. Sika's products are used mainly for bonding, sealing, damping, reinforcing, and protecting in the building and motor vehicle industries. The firm produces additives for concrete, cement, and mortar production, waterproofing systems, roof waterproofing, flooring solutions, sealants, adhesive tapes, assembly foams and elastic adhesives for facade construction, interior and infrastructure construction, as well as concrete protection and repair solutions. The company's reportable segments are based on geography: EMEA, the Americas; Asia-Pacific; and global business. The EMEA segment generates the majority of revenue.
A Glimpse at Sika AG's Dividend History
Sika AG has maintained a consistent dividend payment record since 2018. Dividends are currently distributed on a yearly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Sika AG's Dividend Yield and Growth
As of today, Sika AG currently has a 12-month trailing dividend yield of 1.16% and a 12-month forward dividend yield of 1.16%. This suggests an expectation of same dividend payments over the next 12 months. Over the past three years, Sika AG's annual dividend growth rate was 11.60%. Extended to a five-year horizon, this rate increased to 11.70% per year. And over the past decade, Sika AG's annual dividends per share growth rate stands at an impressive 14.30%.
Based on Sika AG's dividend yield and five-year growth rate, the 5-year yield on cost of Sika AG stock as of today is approximately 2.02%.
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, Sika AG's dividend payout ratio is 0.47.
Sika AG's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Sika AG's profitability 9 out of 10 as of 2023-12-31, 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. Sika AG'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 Sika AG's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Sika AG's revenue has increased by approximately 12.50% per year on average, a rate that outperforms approximately 61.11% 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, Sika AG's earnings increased by approximately 8.70% per year on average, a rate that outperforms approximately 48.76% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 10.20%, which outperforms approximately 54.02% of global competitors.
Next Steps
Considering Sika AG's consistent dividend payments, commendable dividend growth rate, prudent payout ratio, and solid profitability and growth metrics, the company presents a compelling case for value investors seeking stable income with growth potential. While past performance is a useful indicator, investors should also consider the broader economic environment and Sika AG's strategic position within its industry when evaluating the sustainability of its dividends. As the company continues to navigate through market conditions, it remains an interesting prospect for those looking to diversify their income-generating portfolio.
For investors seeking more opportunities, 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.
This article first appeared on GuruFocus.
