Yahoo Finance Arjo AB's Dividend Analysis
Insight into Arjo AB's Upcoming Dividend Payment and Financial Health
Arjo AB (ARRJF) recently announced a dividend of $0.9 per share, payable on 2024-04-25, with the ex-dividend date set for 2024-04-19. 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 Arjo AB's dividend performance and assess its sustainability.
What Does Arjo AB Do?
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Arjo AB is a supplier of medical devices, services, and solutions in Sweden. It serves its services to private and public institutions with acute care and long-term care. The company's offering includes products and solutions for patient handling, hygiene, disinfection, medical beds, therapeutic surfaces, venous thromboembolism (VTE) prevention and diagnostics. It also offers services such as training in connection with product sales. Geographically, it derives a majority of revenue from Western Europe and also has a presence in North America; and the Rest of the World.
A Glimpse at Arjo AB's Dividend History
Arjo AB has maintained a consistent dividend payment record since 2021. Dividends are currently distributed on a yearly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Arjo AB's Dividend Yield and Growth
As of today, Arjo AB currently has a 12-month trailing dividend yield of 1.79% and a 12-month forward dividend yield of 1.88%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Arjo AB's annual dividend growth rate was 9.40%. Extended to a five-year horizon, this rate increased to 15.80% per year. Based on Arjo AB's dividend yield and five-year growth rate, the 5-year yield on cost of Arjo AB stock as of today is approximately 3.73%.
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, Arjo AB's dividend payout ratio is 0.42.
Arjo AB's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Arjo AB's profitability 7 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported positive net income for each of 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. Arjo AB'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 Arjo AB's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Arjo AB's revenue has increased by approximately 6.50% per year on average, a rate that underperforms than approximately 52.81% 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, Arjo AB's earnings increased by approximately -2.90% per year on average, a rate that underperforms than approximately 66.67% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 6.90%, which underperforms than approximately 50.82% of global competitors.
Next Steps
For value investors, Arjo AB presents a mixed picture. While the company has a history of consistent dividend payments and a promising dividend yield, its growth rates in earnings and revenue suggest that there may be challenges ahead. The dividend payout ratio and profitability rank indicate a balance between distributing earnings and retaining capital for growth. However, the underperformance in growth metrics compared to global competitors raises questions about long-term sustainability. Investors should weigh these factors carefully, considering both the potential for steady income and the need for continued company growth. 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.
