Autoliv Inc's Dividend Analysis
Assessing the Dividend Profile of Autoliv Inc
Autoliv Inc (NYSE:ALV) recently announced a dividend of $0.68 per share, payable on 2023-12-13, with the ex-dividend date set for 2023-11-27. 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 Autoliv Inc's dividend performance and assess its sustainability.
Understanding Autoliv Inc's Business
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Autoliv is the global leader in passive safety components and systems for the auto industry. Products include seat belts, frontal air bags, side-impact air bags, air bag inflators, and steering wheels. The Renault-Nissan-Mitsubishi alliance is the company's largest customer at 11% of 2022 revenue, with Stellantis accounting for 11% and Volkswagen 10%. At 34% of 2022 revenue, the Americas was Autoliv's largest geographic region, followed by Europe at 27%, China at 21%, and Japan at 8%.
Autoliv Inc's Dividend Track Record
Autoliv Inc has maintained a consistent dividend payment record since 1997. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Dividend Yield and Growth Insights
As of today, Autoliv Inc currently has a 12-month trailing dividend yield of 2.58% and a 12-month forward dividend yield of 2.65%, suggesting an expectation of increased dividend payments over the next 12 months. Over the past three years, Autoliv Inc's annual dividend growth rate was 1.30%. Extended to a five-year horizon, this rate decreased to -5.00% per year. And over the past decade, Autoliv Inc's annual dividends per share growth rate stands at -1.90%.
Based on Autoliv Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Autoliv Inc stock as of today is approximately 2.00%.
Evaluating Dividend Sustainability
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, Autoliv Inc's dividend payout ratio is 0.55.
Autoliv Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Autoliv Inc's profitability 7 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.
Future Growth Prospects
To ensure the sustainability of dividends, a company must have robust growth metrics. Autoliv 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 Autoliv Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Autoliv Inc's revenue has increased by approximately 1.20% per year on average, a rate that underperforms approximately 67.88% 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, Autoliv Inc's earnings increased by approximately -8.40% per year on average, a rate that underperforms approximately 71.77% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -9.60%, which underperforms approximately 76.91% of global competitors.
Investor Takeaway
In conclusion, while Autoliv Inc has a history of consistent dividend payments, its dividend growth rate and payout ratio indicate a cautious approach to dividend distribution. The company's solid profitability rank and moderate growth prospects suggest a balanced approach to sustaining future dividends. However, investors should also consider the underperformance in revenue and earnings growth rates relative to global competitors. As value investors, it is essential to weigh these factors when evaluating Autoliv Inc's dividend profile.
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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.
