Allegion PLC's Dividend Analysis
Assessing Allegion PLC's Dividend Sustainability and Growth
Allegion PLC (NYSE:ALLE) recently announced a dividend of $0.45 per share, payable on 2023-12-29, with the ex-dividend date set for 2023-12-15. 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 Allegion PLC's dividend performance and assess its sustainability.
What Does Allegion PLC Do?
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Allegion is a global security products company with a portfolio of leading brands such as Schlage, Von Duprin, and LCN. The Ireland-domiciled company was created via a spinoff transaction from Ingersoll-Rand in December 2013. In fiscal 2022, Allegion generated 73% of sales in the United States. The company mainly competes with Sweden-based Assa Abloy and Switzerland-based Dormakaba.
A Glimpse at Allegion PLC's Dividend History
Allegion PLC has maintained a consistent dividend payment record since 2014. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Allegion PLC's Dividend Yield and Growth
As of today, Allegion PLC currently has a 12-month trailing dividend yield of 1.51% and a 12-month forward dividend yield of 1.53%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Allegion PLC's annual dividend growth rate was 14.90%. Extended to a five-year horizon, this rate increased to 20.40% per year. Based on Allegion PLC's dividend yield and five-year growth rate, the 5-year yield on cost of Allegion PLC stock as of today is approximately 3.82%.
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, Allegion PLC's dividend payout ratio is 0.28.
Allegion PLC's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Allegion PLC's profitability 9 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. Allegion PLC's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Allegion PLC's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Allegion PLC's revenue has increased by approximately 7.00% per year on average, a rate that outperforms approximately 56.45% 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, Allegion PLC's earnings increased by approximately 4.80% per year on average, a rate that outperforms approximately 37.78% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 10.90%, which outperforms approximately 56.91% of global competitors.
Next Steps
In conclusion, Allegion PLC's dividend payments, dividend growth rate, payout ratio, profitability, and growth metrics paint a promising picture for value investors. The company's commitment to returning value to shareholders through consistent dividends, coupled with its strong financial health and growth prospects, make it an attractive consideration for dividend-focused portfolios. As investors ponder their next move, they may find Allegion PLC's balance between dividend stability and growth potential to be a compelling reason for investment. Will Allegion PLC continue to be a reliable source of dividends in the years to come? That's a question investors should consider as they evaluate their long-term investment strategy.
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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.
