Yahoo Finance Ferguson PLC's Dividend Analysis
Insight into Ferguson PLC's Upcoming Dividend and Financial Health
Ferguson PLC (NYSE:FERG) recently announced a dividend of $0.79 per share, payable on 2024-02-06, with the ex-dividend date set for 2023-12-14. 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 Ferguson PLC's dividend performance and assess its sustainability.
What Does Ferguson PLC Do?
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Ferguson PLC distributes plumbing and HVAC products primarily to repair, maintenance and improvement, new construction, and civil infrastructure markets. It serves over 1 million customers and sources products from 37,000 suppliers. Ferguson engages customers through approximately 1,700 North American branches, over the phone, online, and in residential showrooms. In fiscal 2023, Ferguson derived 95% of its nearly $30 billion of sales in the U.S. According to Modern Distribution Management, Ferguson is the largest industrial and construction distributor in North America. The firm sold its U.K. business in 2021 and is now solely focused on the North American market.
A Glimpse at Ferguson PLC's Dividend History
Ferguson PLC has maintained a consistent dividend payment record since 2011. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Ferguson PLC's Dividend Yield and Growth
As of today, Ferguson PLC currently has a 12-month trailing dividend yield of 1.64% and a 12-month forward dividend yield of 1.73%, suggesting an expectation of increased dividend payments over the next 12 months. Over the past three years, Ferguson PLC's annual dividend growth rate was 42.10%. Extended to a five-year horizon, this rate decreased to 19.00% per year. And over the past decade, Ferguson PLC's annual dividends per share growth rate stands at an impressive 11.80%. Based on Ferguson PLC's dividend yield and five-year growth rate, the 5-year yield on cost of Ferguson PLC stock as of today is approximately 3.91%.
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 2023-10-31, Ferguson PLC's dividend payout ratio is 0.34. Ferguson PLC's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Ferguson PLC's profitability 8 out of 10 as of 2023-10-31, 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. Ferguson PLC's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Revenue is the lifeblood of any company, and Ferguson PLC's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Ferguson PLC's revenue has increased by approximately 13.90% per year on average, a rate that outperforms approximately 72.14% 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, Ferguson PLC's earnings increased by approximately 25.00% per year on average, a rate that outperforms approximately 61.21% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 22.90%, which outperforms approximately 74.12% of global competitors.
Next Steps
Considering Ferguson PLC's consistent dividend payments, robust dividend growth rate, prudent payout ratio, strong profitability, and impressive growth metrics, the company presents a compelling case for investors seeking a balance of income and growth potential. While past performance is not always indicative of future results, the data suggests that Ferguson PLC is well-positioned to continue its history of dividend reliability. As investors weigh their options, Ferguson PLC's upcoming dividend payment and financial health may offer a reassuring sign of stability in a portfolio. 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.
