AZZ Inc's Dividend Analysis
Assessing the Dividend Performance and Sustainability of AZZ Inc
AZZ Inc (NYSE:AZZ) recently announced a dividend of $0.17 per share, payable on 2023-11-01, with the ex-dividend date set for 2023-10-17. 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 AZZ Inc's dividend performance and assess its sustainability.
Company Overview
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AZZ Inc is a provider of galvanizing and a variety of metal coating solutions and coil coating solutions to a broad range of end markets in North America. In its Metal Coatings segment, the company offers metal finishing services to protect against corrosion, such as hot dip galvanizing, spin galvanizing, powder coating, anodizing, and plating. The Precoat Metals Segment offers aesthetic and corrosion-resistant coatings for steel and aluminum coils.
Dividend History of AZZ Inc
AZZ Inc has maintained a consistent dividend payment record since 2010, with dividends currently distributed on a quarterly basis. Furthermore, AZZ Inc has increased its dividend each year since 2010, earning the stock the status of a dividend achiever, a recognition given to companies that have increased their dividend each year for at least the past 13 years.
Dividend Yield and Growth of AZZ Inc
As of today, AZZ Inc currently has a 12-month trailing dividend yield of 1.44% and a 12-month forward dividend yield of 1.44%, suggesting an expectation of consistent dividend payments over the next 12 months. Over the past decade, AZZ Inc's annual dividends per share growth rate stands at 2.60%. Based on AZZ Inc's dividend yield and five-year growth rate, the 5-year yield on cost of AZZ Inc stock as of today is approximately 1.44%.
Payout Ratio and Profitability: Assessing 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 2023-08-31, AZZ Inc's dividend payout ratio is 0.25.
AZZ Inc's profitability rank, as determined by GuruFocus, is 7 out of 10 as of 2023-08-31, suggesting good profitability prospects. The company has reported net profit in 9 out of the past 10 years.
Future Outlook: Growth Metrics
For dividends to be sustainable, a company must exhibit strong growth metrics. AZZ Inc's growth rank of 7 out of 10 suggests a favourable growth trajectory relative to its competitors. AZZ Inc's revenue has increased by approximately 9.50% per year on average, a rate that outperforms approximately 64.68% 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, AZZ Inc's earnings increased by approximately 8.20% per year on average, a rate that outperforms approximately 45.15% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 2.80% outperforms approximately 35.56% of global competitors.
Conclusion
Based on AZZ Inc's consistent dividend payments, increasing dividend growth rate, low payout ratio, good profitability, and strong growth metrics, it appears that the company's dividends are sustainable for the foreseeable future. However, as with all investments, potential investors should conduct their own research and consider the company's financial health and market conditions before making investment decisions.
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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.
