Yahoo Finance Husqvarna AB's Dividend Analysis
Assessing the Sustainability of Husqvarna AB's Upcoming Dividend
Husqvarna AB (HSQVY) recently announced a dividend of $0.19 per share, payable on an unspecified future date, 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 Husqvarna AB's dividend performance and assess its sustainability.
What Does Husqvarna AB Do?
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Husqvarna AB makes outdoor power products for forest, park, and garden care. The company operates three business segments: Husqvarna, Gardena, and Construction. The Husqvarna segment generates most of the group's revenue. It manufactures and sells outdoor products such as chainsaws, trimmers, mowers, and park and garden care. The other segments offer garden watering and hand tools, as well as professional equipment and diamond tools for cutting and drilling in concrete, stone, and asphalt. Products are sold under the Husqvarna, Gardena, McCulloch, Poulan Pro, Weed Eater, Flymo, Zenoah, and Diamant Boart brands. The company's largest end markets are North America and Europe.
A Glimpse at Husqvarna AB's Dividend History
Husqvarna AB has maintained a consistent dividend payment record since 2007. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Husqvarna AB's Dividend Yield and Growth
As of today, Husqvarna AB currently has a 12-month trailing dividend yield of 3.74% and a 12-month forward dividend yield of 3.78%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Husqvarna AB's annual dividend growth rate was 10.10%. Extended to a five-year horizon, this rate decreased to 7.00% per year. And over the past decade, Husqvarna AB's annual dividends per share growth rate stands at 7.70%.
Based on Husqvarna AB's dividend yield and five-year growth rate, the 5-year yield on cost of Husqvarna AB stock as of today is approximately 5.25%.
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, Husqvarna AB's dividend payout ratio is 0.79, which may suggest that the company's dividend may not be sustainable.
Husqvarna AB's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Husqvarna AB's profitability 9 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported positive net income for each 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. Husqvarna AB'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 Husqvarna AB's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Husqvarna AB's revenue has increased by approximately 8.40% per year on average, a rate that outperforms approximately 51.15% 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, Husqvarna AB's earnings increased by approximately -6.60% per year on average, a rate that outperforms approximately 25.72% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 14.60%, which outperforms approximately 64.39% of global competitors, suggests a strong earnings before interest, taxes, depreciation, and amortization performance.
Next Steps
In conclusion, Husqvarna AB's upcoming dividend payment, along with its historical commitment to returning value to shareholders, makes it a noteworthy consideration for dividend investors. The company's solid dividend growth rate, reasonable payout ratio, strong profitability, and robust growth metrics all contribute to the attractiveness of its dividend profile. However, investors must also consider the potential risks and ensure they are comfortable with the company's financial health and future prospects. As always, it is recommended to perform further research and due diligence before making any investment decisions. 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.
