Yahoo Finance Banco Santander Chile's Dividend Analysis
Delving into Banco Santander Chile's Upcoming Dividend and Financial Health
Banco Santander Chile (NYSE:BSAC) recently announced a dividend of $0.76 per share, payable on a date yet to be confirmed, with the ex-dividend date set for 2024-04-17. 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 Banco Santander Chile's dividend performance and assess its sustainability.
What Does Banco Santander Chile Do?
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Founded in 1978, Banco Santander Chile is part of the Santander group and majority controlled by Santander Spain. Banco Santander Chile is the largest bank in Chile by loans and the second largest by deposits. The bank generates most of its net interest income (roughly 65% of total revenue) from its mortgage, unsecured consumer credit lines, and commercial loans. Banco Santander Chile's commercial loan business is more focused on small- to medium-sized companies, with firms generating more than CLP 10,000 million in revenue only making up around 5% of outstanding loans. Outside of lending, Banco Santander Chile is the largest card issuer in the country with around 25% of the market and benefits from a long-term strategic partnership with the largest airline in the country LATAM Chile.
A Glimpse at Banco Santander Chile's Dividend History
Banco Santander Chile has maintained a consistent dividend payment record since 1995. Dividends are currently distributed on a yearly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Banco Santander Chile's Dividend Yield and Growth
As of today, Banco Santander Chile currently has a 12-month trailing dividend yield of 6.79% and a 12-month forward dividend yield of 4.01%. This suggests an expectation of decreased dividend payments over the next 12 months. Over the past three years, Banco Santander Chile's annual dividend growth rate was 43.10%. Extended to a five-year horizon, this rate decreased to 6.20% per year. And over the past decade, Banco Santander Chile's annual dividends per share growth rate stands at 4.10%.
Based on Banco Santander Chile's dividend yield and five-year growth rate, the 5-year yield on cost of Banco Santander Chile stock as of today is approximately 9.17%.
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, Banco Santander Chile's dividend payout ratio is 0.89. And this may suggest that the company's dividend may not be sustainable.
Banco Santander Chile's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Banco Santander Chile's profitability 5 out of 10 as of 2023-12-31, suggesting fair profitability. 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. Banco Santander Chile's growth rank of 5 out of 10 suggests that the company has a fair growth outlook. Revenue is the lifeblood of any company, and Banco Santander Chile's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Banco Santander Chile's revenue has increased by approximately -2.10% per year on average, a rate that underperforms than approximately 84.43% 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, Banco Santander Chile's earnings increased by approximately -0.10% per year on average, a rate that underperforms than approximately 77.42% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 2.90%, which underperforms than approximately 67.86% of global competitors.
Next Steps
Considering Banco Santander Chile's recent dividend announcement, its history of consistent dividend payments, and its varying growth rates, investors should weigh these factors against the backdrop of the company's payout ratio, profitability, and growth metrics. While the dividend yield remains attractive, the sustainability of such payouts could be a concern if the payout ratio is high and growth rates do not improve. Investors should keep a close eye on these financial health indicators to make informed decisions about Banco Santander Chile's future prospects.
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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.
