Cargojet Inc's Dividend Analysis
Assessing the Sustainability of Cargojet Inc's Upcoming Dividend
Cargojet Inc (CGJTF) recently announced a dividend of $0.32 per share, payable on 2024-04-05, with the ex-dividend date set for 2024-03-19. 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 Cargojet Inc's dividend performance and assess its sustainability.
What Does Cargojet Inc Do?
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Cargojet Inc operates a domestic air cargo co-load network between major Canadian cities. The company provides dedicated aircraft to customers on an Aircraft, Crew, Maintenance and Insurance basis, operating between points in Canada, USA, Mexico and Europe. The company also operates scheduled international routes for multiple cargo customers between the USA and Bermuda, between Canada, UK and Germany, and between Canada and Mexico.
A Glimpse at Cargojet Inc's Dividend History
Cargojet Inc has maintained a consistent dividend payment record since 2011. Dividends are currently distributed on a quarterly basis. Cargojet Inc has increased its dividend each year since 2011. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 13 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Cargojet Inc's Dividend Yield and Growth
As of today, Cargojet Inc currently has a 12-month trailing dividend yield of 1.08% and a 12-month forward dividend yield of 1.16%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Cargojet Inc's annual dividend growth rate was 7.80%. Extended to a five-year horizon, this rate decreased to 6.70% per year. And over the past decade, Cargojet Inc's annual dividends per share growth rate stands at 8.00%.
Based on Cargojet Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Cargojet Inc stock as of today is approximately 1.49%.
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 2023-12-31, Cargojet Inc's dividend payout ratio is 3.03, which may suggest that the company's dividend may not be sustainable.
Cargojet Inc's profitability rank of 7 out of 10 as of 2023-12-31 suggests good profitability prospects. The company has reported net profit in 7 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Cargojet 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 Cargojet Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Cargojet Inc's revenue has increased by approximately 6.00% per year on average, a rate that underperforms approximately 51.97% 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, Cargojet Inc's earnings have decreased by approximately -41.30% per year on average, a rate that underperforms approximately 93.56% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 0.70%, which underperforms approximately 69.52% of global competitors.
Concluding Thoughts on Cargojet Inc's Dividend Prospects
Considering Cargojet Inc's consistent dividend payment history and its status as a dividend achiever, the company has demonstrated a commitment to returning value to shareholders. While the dividend payout ratio appears low, suggesting sustainability, the company's recent earnings performance and growth metrics raise some concerns about future dividend stability. Investors should weigh these factors alongside the company's robust profitability rank and consider the potential for future growth driven by Cargojet Inc's strategic position in the air cargo industry.
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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.
