Yahoo Finance MTR Corp Ltd's Dividend Analysis
An In-depth Look at Upcoming Dividends and Historical Performance
MTR Corp Ltd (MTRJF) recently announced a dividend of $0.89 per share, payable on 2024-07-16, with the ex-dividend date set for 2024-05-24. 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 MTR Corp Ltd's dividend performance and assess its sustainability.
What Does MTR Corp Ltd Do?
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MTR constructs and operates Hong Kong's rail network, giving it a monopoly position. In addition to rail operation, the firm makes recurring income from commercial business within the stations. This includes rental of retail outlets and advertisement within the station and investment properties in shopping malls above stations. Residential real estate development forms part of MTR's return for the rail operation. In a normalized environment, average operating profit is approximately 20% in rail operation, 60% in station commercial and property leasing business, and 20% in property development. The Hong Kong government owns 75% of MTR.
A Glimpse at MTR Corp Ltd's Dividend History
MTR Corp Ltd has maintained a consistent dividend payment record since 2003. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down MTR Corp Ltd's Dividend Yield and Growth
As of today, MTR Corp Ltd currently has a 12-month trailing dividend yield of 4.98% and a 12-month forward dividend yield of 4.98%. This suggests an expectation of same dividend payments over the next 12 months. Over the past three years, MTR Corp Ltd's annual dividend growth rate was 2.10%. Extended to a five-year horizon, this rate increased to 3.90% per year. And over the past decade, MTR Corp Ltd's annual dividends per share growth rate stands at 4.90%.
Based on MTR Corp Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of MTR Corp Ltd stock as of today is approximately 6.03%.
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, MTR Corp Ltd's dividend payout ratio is 1.27, suggesting that the company's dividend may not be sustainable.
MTR Corp Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks MTR Corp Ltd's profitability 6 out of 10 as of 2023-12-31, suggesting fair profitability. The company has reported net profit in 9 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. MTR Corp Ltd's growth rank of 6 out of 10 suggests that the company has a fair growth outlook. Revenue is the lifeblood of any company, and MTR Corp Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. MTR Corp Ltd's revenue has increased by approximately 10.00% per year on average, outperforming approximately 53.68% 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, MTR Corp Ltd's earnings increased by approximately 13.20% per year on average, outperforming approximately 49.4% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -5.60%, which outperforms approximately 18.9% of global competitors.
Next Steps
Considering MTR Corp Ltd's consistent dividend payments, moderate growth in dividend rates, and a robust revenue model, the company presents a potentially stable investment for dividend-seeking investors. However, the high payout ratio could raise concerns about the sustainability of such dividends unless offset by future earnings growth. Investors should keep an eye on the company's future earnings reports and any strategic adjustments that might affect its dividend policies. For those looking to explore more high-dividend yield opportunities, 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.
