Andersons Inc (ANDE): A Deep Dive into its Dividend Performance and Sustainability
Unpacking the Dividend History, Yield, Growth, and Future Prospects of Andersons Inc
Andersons Inc(NASDAQ:ANDE) recently announced a dividend of $0.19 per share, payable on 2023-10-20, with the ex-dividend date set for 2023-09-29. 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 Andersons Inc's dividend performance and assess its sustainability.
What Does Andersons Inc Do?
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Andersons Inc is an agriculture company that conducts business in North America. Its operations are segmented into trade, ethanol, plant nutrient, and rail. The trade group operates grain elevators and generates income through buying and selling grains, fuel, and space leasing. The trade group contributes over half the company's revenue. The ethanol segment buys and sells corn oil and ethanol, offers facility operations, and invests in ethanol plants. The plant nutrient group manufactures, distributes, and sells fertilizer and plant nutrients. The company's rail segment leases, repairs, and sells railway facilities.
A Glimpse at Andersons Inc's Dividend History
Andersons Inc has maintained a consistent dividend payment record since 1996. Dividends are currently distributed on a quarterly basis. Andersons Inc has increased its dividend each year since 1996. The stock is thus listed as a dividend aristocrat, an honor that is given to companies that have increased their dividend each year for at least the past 27 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Andersons Inc's Dividend Yield and Growth
As of today, Andersons Inc currently has a 12-month trailing dividend yield of 1.40% and a 12-month forward dividend yield of 1.41%. This suggests an expectation of increase dividend payments over the next 12 months.
Over the past three years, Andersons Inc's annual dividend growth rate was 1.90%. Extended to a five-year horizon, this rate increased to 2.30% per year. And over the past decade, Andersons Inc's annual dividends per share growth rate stands at 6.10%.
Based on Andersons Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Andersons Inc stock as of today is approximately 1.57%.
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, Andersons Inc's dividend payout ratio is 0.35.
Andersons Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Andersons Inc's profitability 7 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported net profit in 9 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Andersons Inc'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 Andersons Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Andersons Inc's revenue has increased by approximately 27.70% per year on average, a rate that outperforms than approximately 92.73% 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, Andersons Inc's earnings increased by approximately 150.50% per year on average, a rate that outperforms than approximately 97.05% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 18.80%, which outperforms than approximately 70.48% of global competitors.
Next Steps
In conclusion, Andersons Inc's dividend payments, dividend growth rate, payout ratio, profitability, and growth metrics all point to a strong and sustainable dividend performance. The company's ability to consistently grow its dividends, coupled with its strong profitability and growth metrics, makes it an attractive option for value investors seeking reliable income. However, as with any investment, it is crucial to conduct thorough research and consider all relevant factors before making a decision. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article first appeared on GuruFocus.
