AptarGroup Inc's Dividend Analysis
Assessing the Sustainability and Growth of AptarGroup Inc's Dividend
AptarGroup Inc (NYSE:ATR) recently announced a dividend of $0.41 per share, payable on 2023-11-16, with the ex-dividend date set for 2023-10-25. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using data from GuruFocus, this article delves into AptarGroup Inc's dividend performance and assesses its sustainability.
About AptarGroup Inc
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Headquartered in Crystal Lake, Illinois, AptarGroup Inc is a leading global supplier of dispensing systems such as aerosol valves, pumps, and closures to the consumer goods and pharmaceutical markets. With the bulk of its annual net sales coming from Europe (50% of sales) and the United States (33%), AptarGroup Inc aims to increase its presence in Asia (10%) and Latin America (7%). AptarGroup Inc's pharmaceutical division generates roughly one third of group sales but over two thirds of group profits.
AptarGroup Inc's Dividend History
AptarGroup Inc has maintained a consistent dividend payment record since 1993. Dividends are currently distributed on a quarterly basis. AptarGroup Inc has increased its dividend each year since 1993, earning it the status of a dividend aristocrat, an honor given to companies that have increased their dividend each year for at least the past 30 years.
Understanding AptarGroup Inc's Dividend Yield and Growth
As of today, AptarGroup Inc has a 12-month trailing dividend yield of 1.28% and a 12-month forward dividend yield of 1.35%, suggesting an expectation of increased dividend payments over the next 12 months. Over the past three years, AptarGroup Inc's annual dividend growth rate was 2.30%. This rate increased to 3.70% per year over a five-year horizon, and over the past decade, its annual dividends per share growth rate stands at 5.30%.
Assessing Dividend Sustainability: 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, AptarGroup Inc's dividend payout ratio is 0.40.
AptarGroup Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks AptarGroup Inc'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.
Examining Growth Metrics for Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. AptarGroup Inc's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors. AptarGroup Inc's revenue has increased by approximately 4.80% per year on average, a rate that underperforms than approximately 58.13% 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, AptarGroup Inc's earnings increased by approximately -0.60% per year on average, a rate that underperforms than approximately 62.86% of global competitors.
Conclusion
In conclusion, AptarGroup Inc's consistent dividend payment history, combined with its robust profitability and growth metrics, suggests a promising future for its dividend sustainability. However, investors should be aware of the company's growth rate, which lags behind some of its global competitors. Despite this, AptarGroup Inc's dividend growth rate and payout ratio indicate a commitment to returning value to shareholders. Investors looking for high-dividend yield stocks can use the High Dividend Yield Screener available to GuruFocus Premium users.
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.
