Yahoo Finance Garmin Ltd's Dividend Analysis
Exploring the Sustainability and Growth of Garmin Ltd's Dividends
Garmin Ltd (NYSE:GRMN) recently announced a dividend of $0.75 per share, payable on 2024-06-28, with the ex-dividend date set for 2024-06-17. 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 Garmin Ltd's dividend performance and assess its sustainability.
What Does Garmin Ltd Do?
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Garmin produces GPS-enabled hardware and software for five verticals: fitness, outdoors, auto, aviation, and marine. The company relies on licensing mapping data to enable its hardware specialized for often niche activities like scuba diving or sailing. Garmin operates in 100 countries and sells its products via distributors as well as relationships with original equipment manufacturers.
A Glimpse at Garmin Ltd's Dividend History
Garmin Ltd has maintained a consistent dividend payment record since 2003. Dividends are currently distributed on a quarterly basis. Garmin Ltd has increased its dividend each year since 2003. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 21 years.
Breaking Down Garmin Ltd's Dividend Yield and Growth
As of today, Garmin Ltd currently has a 12-month trailing dividend yield of 1.83% 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, Garmin Ltd's annual dividend growth rate was 6.80%. Extended to a five-year horizon, this rate increased to 7.30% per year. And over the past decade, Garmin Ltd's annual dividends per share growth rate stands at 4.90%.
Based on Garmin Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Garmin Ltd stock as of today is approximately 2.60%.
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 2024-03-31, Garmin Ltd's dividend payout ratio is 0.42.
Garmin Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Garmin Ltd's profitability 9 out of 10 as of 2024-03-31, 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. Garmin Ltd'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 Garmin Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Garmin Ltd's revenue has increased by approximately 7.70% per year on average, a rate that outperforms approximately 62.96% 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, Garmin Ltd's earnings increased by approximately 8.50% per year on average, a rate that outperforms approximately 50.49% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 9.00%, which outperforms approximately 48.93% of global competitors.
Conclusion: A Promising Outlook for Dividend Investors
Garmin Ltd's consistent dividend payments, coupled with its robust dividend growth rate, payout ratio, profitability, and growth metrics, present a compelling case for value investors focused on dividend yield. The company's strategic positioning in niche markets, combined with solid financial health, suggests that its dividends are not only sustainable but likely to grow. Investors looking for reliable dividend stocks may find Garmin Ltd an attractive option. 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.
