BDO Unibank Inc's Dividend Analysis
Assessing the Sustainability of BDO Unibank Inc's Upcoming Dividend
BDO Unibank Inc (BDOUY) recently announced a dividend of $0.13 per share, payable on 2024-01-05, with the ex-dividend date set for 2023-12-21. 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 BDO Unibank Inc's dividend performance and assess its sustainability.
What Does BDO Unibank Inc Do?
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BDO Unibank Inc is a full-service universal bank in the Philippines. The company provides a variety of banking products and services, including corporate and consumer lending, deposit-taking, foreign exchange, brokering, trust and investments, credit cards, corporate cash management, and remittances. It also offers leasing and financing, investment banking, private banking, rural banking, bancassurance, and insurance and stock brokerage services through its various local subsidiaries. It has a large distribution network of operating branches and ATMs. Most of its earning assets are loans and other receivables.
A Glimpse at BDO Unibank Inc's Dividend History
BDO Unibank Inc has maintained a consistent dividend payment record since 2015. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down BDO Unibank Inc's Dividend Yield and Growth
As of today, BDO Unibank Inc currently has a 12-month trailing dividend yield of 21.93% and a 12-month forward dividend yield of 21.91%. This suggests an expectation of stable dividend payments over the next 12 months. Over the past three years, BDO Unibank Inc's annual dividend growth rate was 1.60%. Extended to a five-year horizon, this rate decreased to 0.70% per year. Based on BDO Unibank Inc's dividend yield and five-year growth rate, the 5-year yield on cost of BDO Unibank Inc stock as of today is approximately 22.71%.
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, BDO Unibank Inc's dividend payout ratio is 2.01, which may suggest that the company's dividend is sustainable given its low payout ratio. BDO Unibank Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks BDO Unibank 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.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. BDO Unibank 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 BDO Unibank Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. BDO Unibank Inc's revenue has increased by approximately 6.80% per year on average, a rate that outperforms approximately 53.2% 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, BDO Unibank Inc's earnings increased by approximately 9.00% per year on average, a rate that outperforms approximately 52.2% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 11.80%, which outperforms approximately 62.45% of global competitors.
Next Steps
In conclusion, BDO Unibank Inc's forthcoming dividend, backed by a strong dividend history and a robust yield, appears to be on solid footing. The company's low payout ratio, coupled with a good profitability rank, supports the notion that dividends are sustainable. Moreover, the positive growth metrics, including revenue per share and EPS growth, suggest that BDO Unibank Inc is poised to continue its dividend payments while still investing in future growth. As value investors consider their next moves, they should weigh these factors to make informed decisions about BDO Unibank Inc's dividend prospects. 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.
