Assessing the Sustainability of Cargojet Inc's Dividend: A Deep Dive
Unraveling the Dividend Performance and Prospects of Cargojet Inc (CGJTF)
Cargojet Inc(CGJTF) recently announced a dividend of $0.29 per share, payable on 2023-10-05, with the ex-dividend date set for 2023-09-19. 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 Cargojet Incs dividend performance and assess its sustainability.
What Does Cargojet Inc Do?
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Cargojet Inc operates a domestic air cargo co-load network between sixteen major Canadian cities. The company provides dedicated aircraft to customers on an Aircraft, Crew, Maintenance and Insurance basis, operating between points in Canada, USA, Mexico and Europe. The company also operates scheduled international routes for multiple cargo customers between the USA and Bermuda, between Canada, UK and Germany, and between Canada and Mexico.
A Glimpse at Cargojet Inc's Dividend History
Cargojet Inc has maintained a consistent dividend payment record since 2011. Dividends are currently distributed on a quarterly basis. Cargojet Inc has increased its dividend each year since 2011. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 12 years.
Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Cargojet Inc's Dividend Yield and Growth
As of today, Cargojet Inc currently has a 12-month trailing dividend yield of 1.16% and a 12-month forward dividend yield of 1.15%. This suggests an expectation of decrease dividend payments over the next 12 months.
Over the past three years, Cargojet Inc's annual dividend growth rate was 6.10%. Extended to a five-year horizon, this rate increased to 7.30% per year. And over the past decade, Cargojet Inc's annual dividends per share growth rate stands at 7.60%.
Based on Cargojet Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Cargojet Inc stock as of today is approximately 1.65%.
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, Cargojet Inc's dividend payout ratio is 0.14.
Cargojet Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Cargojet Inc's profitability 8 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported net profit in 7 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Cargojet Inc's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Cargojet Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Cargojet Inc's revenue has increased by approximately 10.50% per year on average, a rate that outperforms than approximately 63.57% 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, Cargojet Inc's earnings increased by approximately 128.60% per year on average, a rate that outperforms than approximately 92.91% of global competitors.
Next Steps
Given Cargojet Inc's consistent dividend payments, strong growth rate, low payout ratio, and impressive profitability, the company presents a compelling case for dividend sustainability. However, investors should continue to monitor these metrics and other factors, such as market trends and the company's strategic initiatives, to make informed investment decisions. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article first appeared on GuruFocus.
