Yahoo Finance Petronas Chemicals Group Bhd's Dividend Analysis
Assessing the Sustainability of Petronas Chemicals Group Bhd's Dividend
Petronas Chemicals Group Bhd (PECGF) recently announced a dividend of $0.05 per share, payable on 2024-03-26, with the ex-dividend date set for 2024-03-12. 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 Petronas Chemicals Group Bhd's dividend performance and assess its sustainability.
What Does Petronas Chemicals Group Bhd Do?
Warning! GuruFocus has detected 10 Warning Signs with PECGF.
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Petronas Chemicals Group Bhd manufactures and sells a variety of petrochemicals. The firm organizes itself into three segments based on product type: Olefins and Derivatives; Fertilizers and Methanol; and Specialties. The Olefins and Derivatives segment, which generates the majority of revenue, sells chemicals used in the production of acrylic acids, antifreeze, printing ink, dyes, gas treating solvents, personal care products, and plastics used in packaging films, wires, cables, and ducting. The Fertilizers and Methanol segment sells chemicals used in gasoline additives, plastic resins, ammonia, and fertilizers. The majority of revenue comes from Malaysia.
A Glimpse at Petronas Chemicals Group Bhd's Dividend History
Petronas Chemicals Group Bhd has maintained a consistent dividend payment record since 2020. Dividends are currently distributed on a bi-annual basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Petronas Chemicals Group Bhd's Dividend Yield and Growth
As of today, Petronas Chemicals Group Bhd currently has a 12-month trailing dividend yield of 5.66% and a 12-month forward dividend yield of 2.24%. This suggests an expectation of decreased dividend payments over the next 12 months. Over the past three years, Petronas Chemicals Group Bhd's annual dividend growth rate was 26.00%. Extended to a five-year horizon, this rate decreased to 4.30% per year. And over the past decade, Petronas Chemicals Group Bhd's annual dividends per share growth rate stands at 5.00%.
Based on Petronas Chemicals Group Bhd's dividend yield and five-year growth rate, the 5-year yield on cost of Petronas Chemicals Group Bhd stock as of today is approximately 6.99%.
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, Petronas Chemicals Group Bhd's dividend payout ratio is 1.13, which may suggest that the company's dividend may not be sustainable.
Petronas Chemicals Group Bhd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Petronas Chemicals Group Bhd's profitability 8 out of 10 as of 2023-12-31, 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. Petronas Chemicals Group Bhd'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 Petronas Chemicals Group Bhd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Petronas Chemicals Group Bhd's revenue has increased by approximately 25.90% per year on average, a rate that outperforms approximately 84.13% 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, Petronas Chemicals Group Bhd's earnings increased by approximately 1.30% per year on average, a rate that outperforms approximately 35.74% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -3.50%, which outperforms approximately 21.82% of global competitors.
Engaging Conclusion
Considering Petronas Chemicals Group Bhd's dividend payments, growth rate, payout ratio, profitability, and growth metrics, investors are presented with a multifaceted view of the company's financial health. While the payout ratio may raise questions about dividend sustainability, the company's strong profitability and growth rankings provide a counterbalance, indicating potential for continued dividend distributions. Value investors must weigh these factors to determine if Petronas Chemicals Group Bhd aligns with their investment goals. Will Petronas Chemicals Group Bhd continue to be a reliable source of dividends in the years to come?
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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.
