Ashtead Group PLC's Dividend Analysis
Understanding the Dividend Dynamics of Ashtead Group PLC
Ashtead Group PLC (ASHTY) recently announced a dividend of $0.63 per share, payable on 2024-02-23, with the ex-dividend date set for 2024-01-11. 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 Ashtead Group PLC's dividend performance and assess its sustainability.
What Does Ashtead Group PLC Do?
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Ashtead Group PLC is an equipment rental business with a strong presence in the U.S., Canada, and the United Kingdom, operating under the Sunbelt Rentals brand. The company enjoys a significant market position in the U.S., holding a 13% market share in a highly fragmented industry that includes national, regional, and independent competitors. Ashtead Group PLC provides a wide array of construction, industrial, and general equipment such as aerial lifts, hand-held tools, and forklifts through its expansive network of over 1,550 rental stores globally.
A Glimpse at Ashtead Group PLC's Dividend History
Since 2014, Ashtead Group PLC has established a track record of consistent dividend payments, disbursing dividends bi-annually. To better understand the historical trends, investors can refer to the chart below, which illustrates the annual Dividends Per Share over time.
Breaking Down Ashtead Group PLC's Dividend Yield and Growth
Ashtead Group PLC currently boasts a 12-month trailing dividend yield of 1.50% and a forward dividend yield of 1.52%, indicating an anticipated increase in dividend payments over the next year. The company's annual dividend growth rate over the past three years stands at 17.60%, which slightly dips to 17.00% when extended over five years. However, over the past decade, the annual dividends per share growth rate impressively reaches 27.10%.
Factoring in Ashtead Group PLC's dividend yield and five-year growth rate, the 5-year yield on cost for the company's stock is approximately 3.29% as of today.
The Sustainability Question: Payout Ratio and Profitability
To gauge the sustainability of Ashtead Group PLC's dividends, one must examine the dividend payout ratio, which currently stands at 0.26 as of 2023-10-31. This ratio indicates the proportion of earnings allocated to dividends and suggests that the company retains a significant portion of its earnings for future growth and stability. Moreover, Ashtead Group PLC's profitability rank is a perfect 10 out of 10, reflecting excellent profitability prospects compared to its peers. The company has also reported consistent positive net income for the past decade, reinforcing its strong financial position.
Growth Metrics: The Future Outlook
The future sustainability of dividends is tied to a company's growth metrics, and Ashtead Group PLC's growth rank of 10 out of 10 signals a robust trajectory. The company's revenue per share and 3-year revenue growth rate indicate a solid revenue model, with an average annual increase of 16.60%, outperforming approximately 79.96% of global competitors.
Ashtead Group PLC's 3-year EPS growth rate of 21.00% per year on average, and a 5-year EBITDA growth rate of 16.80%, further demonstrate the company's ability to enhance its earnings, outperforming 65.88% and 68.87% of global competitors, respectively.
Next Steps
In conclusion, Ashtead Group PLC's consistent dividend payments, robust dividend growth rate, prudent payout ratio, and strong profitability and growth metrics make it an attractive consideration for value investors focused on dividend income. The company's financial health and market position suggest that it is well-equipped to sustain and potentially grow its dividends in the future. Investors interested in high-dividend yield opportunities may find value in exploring Ashtead Group PLC further, alongside other promising candidates using tools like 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.
