Yahoo Finance Empire Co Ltd's Dividend Analysis
Assessing the Sustainability and Growth of Empire Co Ltd's Dividend
Empire Co Ltd (EMLAF) recently announced a dividend of $0.18 per share, payable on 2024-04-30, with the ex-dividend date set for 2024-04-12. 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 Empire Co Ltd's dividend performance and assess its sustainability.
What Does Empire Co Ltd Do?
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Empire Co Ltd's key businesses are food retailing, investments, and other operations. The food retailing division operates through Empire's subsidiary Sobeys and represents nearly all of the company's income. This segment owns, affiliates, or franchises more than 1,500 stores in 10 provinces, under retail banners including Sobeys, Safeway, IGA, Foodland, FreshCo, Thrifty Foods, Lawton's Drug Stores, and multiple retail fuel locations. The company's investment and other operations segment include the investment in Crombie REIT, which is an open-ended Canadian real estate investment trust, as well as the Genstar Development Partnership.
A Glimpse at Empire Co Ltd's Dividend History
Empire Co Ltd has maintained a consistent dividend payment record since 2004, distributing dividends on a quarterly basis. The company has increased its dividend each year since then, earning the status of a dividend achiever, a prestigious recognition for companies with at least 20 consecutive years of dividend increases. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Empire Co Ltd's Dividend Yield and Growth
As of today, Empire Co Ltd currently has a 12-month trailing dividend yield of 2.18% and a 12-month forward dividend yield of 2.24%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Empire Co Ltd's annual dividend growth rate was 11.20%, which decreased to 9.80% per year over a five-year period. Over the past decade, the annual dividends per share growth rate stands at 6.90%. Based on Empire Co Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Empire Co Ltd stock as of today is approximately 3.48%.
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 2024-01-31, Empire Co Ltd's dividend payout ratio is 0.29. Empire Co Ltd's profitability rank, at 7 out of 10, suggests good profitability prospects. The company has reported net profit in 9 years out of the past 10 years.
Growth Metrics: The Future Outlook
Empire Co Ltd's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Empire Co Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model, with an average annual increase of 6.20%, outperforming approximately 54.42% 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, with an average annual increase of 7.80%, outperforming approximately 46.67% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 36.10% outperforms approximately 90.06% of global competitors.
Next Steps
In conclusion, Empire Co Ltd's consistent dividend payments, robust dividend growth rate, prudent payout ratio, solid profitability, and strong growth metrics paint a promising picture for current and prospective investors. The company's strategic positioning in the retail sector, along with its operational investments, indicate a commitment to maintaining its dividend achiever status. As value investors consider the prospects of Empire Co Ltd, they may find reassurance in the company's financial health and potential for continued dividend growth. Will Empire Co Ltd continue its trajectory as a dividend achiever in the years to come? For investors seeking high-dividend yield stocks, GuruFocus Premium offers the High Dividend Yield Screener as a resourceful tool.
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.
