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Schindler Holding AG's Dividend Analysis

Understanding the Dividend Prospects of Schindler Holding AG (SHLRF)

Schindler Holding AG (SHLRF) recently announced a dividend of $4 per share, payable on 2024-03-25, with the ex-dividend date set for 2024-03-21. 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 Schindler Holding AG's dividend performance and assess its sustainability.

What Does Schindler Holding AG Do?

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Switzerland-based Schindler is a top-four global supplier of elevators and escalators. The business generates revenue in three ways: selling new elevators and escalators, modernizing old equipment, and servicing existing installations. Most of the company's profit comes from the last activity, where contracts are rolled over annually with built-in price increases. Ninety percent of its business is in elevators, which are more numerous globally than escalators. Its business model is similar to that of closest competitors Otis, Kone, and TK Elevator.

A Glimpse at Schindler Holding AG's Dividend History

Schindler Holding AG has maintained a consistent dividend payment record since 2020. Dividends are currently distributed on a yearly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.

Breaking Down Schindler Holding AG's Dividend Yield and Growth

As of today, Schindler Holding AG currently has a 12-month trailing dividend yield of 1.64% and a 12-month forward dividend yield of 1.70%. This suggests an expectation of increased dividend payments over the next 12 months. And over the past decade, Schindler Holding AG's annual dividends per share growth rate stands at 7.80%.

Based on Schindler Holding AG's dividend yield and five-year growth rate, the 5-year yield on cost of Schindler Holding AG stock as of today is approximately 1.64%.

Schindler Holding AG's Dividend Analysis
Schindler Holding AG's Dividend Analysis

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, Schindler Holding AG's dividend payout ratio is 0.60.

Schindler Holding AG's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Schindler Holding AG's profitability 7 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. Schindler Holding AG's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Revenue is the lifeblood of any company, and Schindler Holding AG's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Schindler Holding AG's revenue has increased by approximately 2.60% per year on average, a rate that underperforms approximately 65.61% 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, Schindler Holding AG's earnings increased by approximately 6.00% per year on average, a rate that underperforms approximately 57.75% of global competitors.

Lastly, the company's 5-year EBITDA growth rate of -3.80%, which underperforms approximately 75.55% of global competitors, raises concerns about its future earning potential.

Concluding Thoughts on Schindler Holding AG's Dividend Profile

Investors considering Schindler Holding AG for its dividend income should weigh the company's consistent dividend history against its moderate yield and growth rates. While the payout ratio and profitability rank are reassuring, the mixed performance in growth metrics suggests a need for cautious optimism. The potential for future dividend increases may hinge on Schindler Holding AG's ability to enhance its growth in a competitive global market. As value investors, it's crucial to monitor these indicators to make informed decisions about the sustainability of Schindler Holding AG's dividend payments.

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.