Cable One Inc's Dividend Analysis
Scrutinizing the Upcoming Dividend and Historical Performance
Cable One Inc (NYSE:CABO) recently announced a dividend of $2.95 per share, payable on 2023-12-15, with the ex-dividend date set for 2023-11-27. 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 Cable One Inc's dividend performance and assess its sustainability.
What Does Cable One Inc Do?
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Cable One Inc is a telecommunications company. It derives revenue from the provision of broadband, voice, and video services to residential and business customers. From a product perspective, the majority of revenue is sourced from data and video services. This revenue is subscription-based and billed monthly. The company also offers Sparklight TV, an internet protocol-based (IPTV) video service that allows customers with our Sparklight TV app to stream our video channels from the cloud. The company also derives advertising revenue from selling airtime on its video channels. Voice services are offered over Internet protocols. The company owns a telecommunications infrastructure.
A Glimpse at Cable One Inc's Dividend History
Cable One 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 Cable One Inc's Dividend Yield and Growth
Cable One Inc currently has a 12-month trailing dividend yield of 2.11% and a 12-month forward dividend yield of 2.17%. This suggests an expectation of increased dividend payments over the next 12 months. Cable One Inc's dividend yield of 2.11% is near a 10-year high and outperforms 24.89% of global competitors in the Telecommunication Services industry, suggesting that the company's dividend yield stands out as an attractive proposition for income investors.
Over the past three years, Cable One Inc's annual dividend growth rate was 9.60%. Extended to a five-year horizon, this rate increased to 11.60% per year. Based on Cable One Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Cable One Inc stock as of today is approximately 3.65%.
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, Cable One Inc's dividend payout ratio is 0.81, which may suggest that the company's dividend may not be sustainable.
Cable One Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Cable One Inc's profitability 9 out of 10 as of 2023-09-30, suggesting good profitability prospects. 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. Cable One Inc's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Cable One Inc's revenue has increased by approximately 9.90% per year on average, a rate that outperforms approximately 73.87% 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, Cable One Inc's earnings increased by approximately 5.40% per year on average, a rate that outperforms approximately 51.3% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 3.20%, which outperforms approximately 45.67% of global competitors.
Next Steps
Considering Cable One Inc's consistent dividend payments, robust dividend growth rate, and its payout ratio, investors should weigh the sustainability of these dividends. The company's solid profitability and positive growth metrics present a favorable outlook, yet the payout ratio may indicate potential caution. As value investors contemplate their next move, it's essential to factor in these elements for a well-rounded investment decision. 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.
