Avient Corp's Dividend Analysis
Understanding the Dividend Dynamics of Avient Corp
Avient Corp (NYSE:AVNT) recently announced a dividend of $0.26 per share, payable on 2024-04-05, with the ex-dividend date set for 2024-03-18. 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 Avient Corp's dividend performance and assess its sustainability.
What Does Avient Corp Do?
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Avient Corp manufactures and sells a variety of chemical and plastic-based products to designers and processors of plastics. The firm operates in three segments: Specialty Engineered Materials; Distribution; and Color, Additives, & Ink. The company's product portfolio includes concentrated color and ink blends, plastic resins, and various specialized polymer materials used in industries such as food packaging, construction, transportation, cosmetics, and healthcare. The color, additives, & ink segment and the distribution segment together generate a vast majority of revenue. More than half of the total revenue is derived from the United States.
A Glimpse at Avient Corp's Dividend History
Avient Corp has maintained a consistent dividend payment record since 2011. Dividends are currently distributed on a quarterly basis.
Avient Corp has increased its dividend each year since 2011, earning it the status of a dividend achiever, an accolade reserved for companies that have raised their dividend annually for at least the past 13 years. Below is a chart showing annual Dividends Per Share to track historical trends.
Breaking Down Avient Corp's Dividend Yield and Growth
As of today, Avient Corp currently has a 12-month trailing dividend yield of 2.44% and a 12-month forward dividend yield of 2.52%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Avient Corp's annual dividend growth rate was 6.80%. Extended to a five-year horizon, this rate remained consistent. And over the past decade, Avient Corp's annual dividends per share growth rate stands at an impressive 14.00%.
Based on Avient Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Avient Corp stock as of today is approximately 3.39%.
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 2023-12-31, Avient Corp's dividend payout ratio is 0.51.
Avient Corp's profitability rank, at 7 out of 10 as of 2023-12-31, suggests good profitability prospects. The company has reported net profit in 9 out of the past 10 years.
Growth Metrics: The Future Outlook
Avient Corp's growth rank of 7 out of 10 indicates a positive growth trajectory relative to its competitors.
Revenue per share and the 3-year revenue growth rate are essential indicators of a strong revenue model. Avient Corp's revenue has grown by approximately -1.50% per year on average, underperforming about 80.62% of global competitors.
The company's 3-year EPS growth rate is a vital measure of its ability to increase earnings, crucial for sustaining dividends. Avient Corp's earnings have grown by approximately 17.40% per year on average, outperforming about 59.62% of global competitors.
The 5-year EBITDA growth rate of 11.20% underperforms about 44.37% of global competitors.
Next Steps
Considering Avient Corp's consistent dividend payments, solid dividend growth rate, moderate payout ratio, and respectable profitability and growth metrics, the company presents a compelling case for dividend investors. While the revenue growth rate could be a concern, the strong EPS growth rate and EBITDA growth rate suggest that Avient Corp is capable of sustaining its dividends and potentially increasing them in the future. Investors looking for dividend-paying stocks with a history of growth may find Avient Corp an attractive option to consider for their portfolios.
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
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.
