Bodycote PLC: An In-depth Analysis of Its Dividend Performance and Sustainability
Understanding Bodycote PLC's dividend history, yield, growth rates, and future prospects based on data from GuruFocus
Bodycote PLC (BYPLF) recently announced a dividend of $0.07 per share, payable on 2023-11-10, with the ex-dividend date set for 2023-10-05. 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 Bodycote PLC's dividend performance and assess its sustainability.
Company Overview: Bodycote PLC (BYPLF)
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Bodycote PLC provides thermal processing services including heat treatment, metal joining, surface coating technologies, and hot isostatic pressing. The company operates through two segments. The aerospace, defence, and energy segment offer thermal processing services across applications including general aviation, aircraft, helicopters, power generation, and others. The automotive and general industrial markets segment provides thermal processing services across the automotive industry and general industries. It generates the majority of its revenue from Western Europe and North America.
Bodycote PLC's Dividend History
Bodycote PLC has maintained a consistent dividend payment record since 2009. Dividends are currently distributed on a bi-annual basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Bodycote PLC's Dividend Yield and Growth
As of today, Bodycote PLC currently has a 12-month trailing dividend yield of 3.13% and a 12-month forward dividend yield of 3.31%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Bodycote PLC's annual dividend growth rate was 1.50%. Extended to a five-year horizon, this rate increased to 4.20% per year. And over the past decade, Bodycote PLC's annual dividends per share growth rate stands at 6.00%.
Based on Bodycote PLC's dividend yield and five-year growth rate, the 5-year yield on cost of Bodycote PLC stock as of today is approximately 3.84%.
The Sustainability of Bodycote PLC's Dividend
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, Bodycote PLC's dividend payout ratio is 0.49.
Bodycote PLC's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Bodycote PLC's profitability 7 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Bodycote PLC's Growth Metrics
To ensure the sustainability of dividends, a company must have robust growth metrics. Bodycote PLC'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 Bodycote PLC's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Bodycote PLC's revenue has increased by approximately 1.00% per year on average, a rate that underperforms approximately 70.13% 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, Bodycote PLC's earnings increased by approximately -7.80% per year on average, a rate that underperforms approximately 75.79% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -21.70%, underperforms approximately 94.72% of global competitors.
Conclusion
In conclusion, Bodycote PLC's consistent dividend payment record, decent yield, and growth rates reflect positively on its financial health. However, its payout ratio and profitability rank suggest that it retains a significant portion of its earnings for growth and unforeseen challenges, indicating a sustainable dividend. Despite some underperformance in growth metrics relative to global competitors, the company's overall growth trajectory remains promising. Hence, Bodycote PLC appears to be a viable option for investors seeking consistent dividend returns.
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This article first appeared on GuruFocus.
