Banco Santander (Brasil) SA's Dividend Analysis
An In-Depth Look at BSBR's Dividend Sustainability and Growth
Banco Santander (Brasil) SA (NYSE:BSBR) recently announced a dividend of $0.08 per share, payable on 2024-02-20, with the ex-dividend date set for 2024-01-22. 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 Banco Santander (Brasil) SA's dividend performance and assess its sustainability.
What Does Banco Santander (Brasil) SA Do?
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Banco Santander (Brasil) SA is part of Santander Group, a Spanish bank present also in Brazil, Mexico, Argentina, and Chile. The bank's operations are divided into two major divisions: Commercial Banking provides services and products to individuals and companies. The revenue from this segment is derived from the banking and financial products and services available to the account and non-account holders. Global Wholesale Banking offers a wide range of national and international tailored financial services and structured solutions for global corporate customers, comprised mostly of local and multinational corporations. The bank has operations in Brazil and internationally.
A Glimpse at Banco Santander (Brasil) SA's Dividend History
Banco Santander (Brasil) SA has maintained a consistent dividend payment record since 2009. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Banco Santander (Brasil) SA's Dividend Yield and Growth
As of today, Banco Santander (Brasil) SA currently has a 12-month trailing dividend yield of 5.46% and a 12-month forward dividend yield of 5.38%. This suggests an expectation of a slight decrease in dividend payments over the next 12 months.
Over the past three years, Banco Santander (Brasil) SA's annual dividend growth rate was 1.40%. Extended to a five-year horizon, this rate increased to 33.60% per year. And over the past decade, Banco Santander (Brasil) SA's annual dividends per share growth rate stands at an impressive 21.90%.
Based on Banco Santander (Brasil) SA's dividend yield and five-year growth rate, the 5-year yield on cost of Banco Santander (Brasil) SA stock as of today is approximately 23.24%.
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 2023-09-30, Banco Santander (Brasil) SA's dividend payout ratio is 1.31, which may suggest that the company's dividend could be at risk if profitability falters.
Banco Santander (Brasil) SA's profitability rank of 5 out of 10 as of 2023-09-30, suggests fair profitability. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Banco Santander (Brasil) SA's growth rank of 5 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and Banco Santander (Brasil) SA's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. However, Banco Santander (Brasil) SA's revenue has increased by approximately -2.60% per year on average, a rate that underperforms approximately 88.09% 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, Banco Santander (Brasil) SA's earnings increased by approximately -5.60% per year on average, a rate that underperforms approximately 86.9% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 5.40%, which underperforms approximately 60.62% of global competitors, adds to the concerns regarding the dividend's future growth potential.
Next Steps
In conclusion, while Banco Santander (Brasil) SA has a history of consistent dividend payments and an impressive five-year growth rate, its payout ratio and growth metrics present a mixed picture. The slightly declining forward dividend yield and the underperformance in revenue and earnings growth relative to global competitors may raise concerns about the long-term sustainability of the dividend. Investors should weigh these factors against the company's overall financial health and market position. For those seeking to expand their portfolio with high-dividend yield stocks, GuruFocus Premium offers a High Dividend Yield Screener to identify potential opportunities.
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.
