Akzo Nobel NV's Dividend Analysis
An Examination of the Dutch Paint and Coatings Producer's Dividend Performance and Sustainability
Akzo Nobel NV (AKZOY) recently announced a dividend of $0.16 per share, payable on 2023-11-16, with the ex-dividend date set for 2023-11-03. 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 delve into Akzo Nobel NV's dividend performance and assess its sustainability.
What Does Akzo Nobel NV Do?
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Netherlands-based Akzo Nobel NV is the world's third-largest paint and coatings producer. Europe is the largest market, accounting for around 46% of sales generated in the Europe, Middle East, and Africa (EMEA) region. Cumulatively, the Asia-Pacific and Latin American divisions have also grown quickly to more than 40% of sales. Construction-related end markets are the most important, but meaningful revenue is also generated from the industrial, consumer goods, and transportation markets.
A Glimpse at Akzo Nobel NV's Dividend History
Akzo Nobel NV has maintained a consistent dividend payment record since 2000. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Akzo Nobel NV's Dividend Yield and Growth
As of today, Akzo Nobel NV currently has a 12-month trailing dividend yield of 3.13% and a 12-month forward dividend yield of 3.19%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Akzo Nobel NV's annual dividend growth rate was 2.50%. Extended to a five-year horizon, this rate decreased to -2.90% per year. And over the past decade, Akzo Nobel NV's annual dividends per share growth rate stands at 2.90%. Based on Akzo Nobel NV's dividend yield and five-year growth rate, the 5-year yield on cost of Akzo Nobel NV stock as of today is approximately 2.70%.
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 2023-09-30, Akzo Nobel NV's dividend payout ratio is 0.83. This may suggest that the company's dividend may not be sustainable.
Akzo Nobel NV's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Akzo Nobel NV's profitability 7 out of 10 as of 2023-09-30, 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. Akzo Nobel NV'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 Akzo Nobel NV's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Akzo Nobel NV's revenue has increased by approximately 12.60% per year on average, a rate that outperforms approximately 59.71% 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, Akzo Nobel NV's earnings increased by approximately -5.20% per year on average, a rate that outperforms approximately 25.83% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 9.70%, outperforms approximately 48.58% of global competitors.
Next Steps
In conclusion, while Akzo Nobel NV has a commendable track record of consistent dividend payments and a decent growth trajectory, its high payout ratio raises questions about the sustainability of its dividends. The company's strong profitability and growth metrics, however, provide some reassurance. Investors should keep a close eye on these factors while considering Akzo Nobel NV for their portfolio. 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.
