Acme United Corp's Dividend Analysis: A Comprehensive Look
Exploring the Dividend Performance and Sustainability of Acme United Corp (ACU)
Acme United Corp (ACU) recently announced a dividend of $0.14 per share, payable on 2023-10-24, with the ex-dividend date set for 2023-10-03. 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 deep dive into Acme United Corp's dividend performance and assess its sustainability.
What Does Acme United Corp Do?
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Acme United Corp is a supplier of first aid and medical products and cutting technology to the school, home, office, hardware, sporting goods, and industrial markets. Its principal products sold across all segments are first aid kits and medical products, scissors, shears, knives, rulers, pencil sharpeners, and sharpening tools. The Company sells its products to mass market and e-commerce retailers, industrial distributors, wholesale, contract, and retail stationery distributors, office supply superstores, sporting goods stores, and hardware chains. The Company's reportable business segments consist of the United States, Canada, and Europe, out of which a majority of the company's revenue is derived from the United States.
A Glimpse at Acme United Corp's Dividend History
Acme United Corp has maintained a consistent dividend payment record since 2004. Dividends are currently distributed on a quarterly basis. Acme United Corp has increased its dividend each year since 2004. 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 19 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Acme United Corp's Dividend Yield and Growth
As of today, Acme United Corp currently has a 12-month trailing dividend yield of 1.88% and a 12-month forward dividend yield of 1.88%. This suggests an expectation of same dividend payments over the next 12 months.
Over the past three years, Acme United Corp's annual dividend growth rate was 4.60%. Extended to a five-year horizon, this rate increased to 4.90% per year. And over the past decade, Acme United Corp's annual dividends per share growth rate stands at 6.70%.
Based on Acme United Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Acme United Corp stock as of today is approximately 2.39%.
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 2023-06-30, Acme United Corp's dividend payout ratio is 0.51.
Acme United Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Acme United Corp's profitability 8 out of 10 as of 2023-06-30, 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. Acme United Corp'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 Acme United Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Acme United Corp's revenue has increased by approximately 8.10% per year on average, a rate that outperforms than approximately 55.2% 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, Acme United Corp's earnings increased by approximately -20.00% per year on average, a rate that outperforms than approximately 20.95% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 5.50%, which outperforms than approximately 49.57% of global competitors.
Next Steps
Considering the consistent dividend payments, impressive growth rate, healthy payout ratio, strong profitability, and positive growth metrics, Acme United Corp presents a promising investment opportunity for dividend-focused investors. However, investors are encouraged to conduct their own due diligence before making investment decisions. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article first appeared on GuruFocus.
