Avnet Inc (AVT): A Comprehensive Analysis of Its Dividend Performance and Sustainability
Unpacking the Dividend Dynamics of Avnet Inc
Avnet Inc (NASDAQ:AVT) recently announced a dividend of $0.31 per share, payable on 2023-09-27, with the ex-dividend date set for 2023-09-12. 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 Avnet Incs dividend performance and assess its sustainability.
What Does Avnet Inc Do?
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Avnet Inc is a global distributor of electronic components, connecting suppliers of semiconductors and other components to a base of 2.1 million small- and mid-sized customers in 140 countries. Avnet is the third largest semiconductor distributor in the world, and the largest for European chip distribution. Avnet services all levels of electronics design and development, servicing engineers with design tools, test kits, and services alongside its high-volume distribution for final designs.
A Glimpse at Avnet Inc's Dividend History
Avnet Inc has maintained a consistent dividend payment record since 2013. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Avnet Inc's Dividend Yield and Growth
As of today, Avnet Inc currently has a 12-month trailing dividend yield of 2.41% and a 12-month forward dividend yield of 2.56%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Avnet Inc's annual dividend growth rate was 11.40%. Extended to a five-year horizon, this rate decreased to 8.70% per year. Based on Avnet Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Avnet Inc stock as of today is approximately 3.66%.
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, Avnet Inc's dividend payout ratio is 0.14.
Avnet Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Avnet Inc's profitability 7 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported net profit in 8 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Avnet 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 Avnet Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Avnet Inc's revenue has increased by approximately 17.40% per year on average, a rate that outperforms approximately 81.93% of global competitors.
Avnet Inc: A Sustainable Dividend Investment?
Considering Avnet Inc's consistent dividend payments, steady growth rate, low payout ratio, good profitability, and robust growth metrics, it appears to be a promising investment for dividend-focused investors. However, as with any investment, it's crucial to conduct thorough research and consider the company's overall financial health and market position before making a decision. Will Avnet Inc continue to sustain its dividend performance? Only time will tell.
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This article first appeared on GuruFocus.
