Carrier Global Corp's Dividend Analysis
Assessing the Sustainability and Growth of Carrier Global Corp's Dividends
Carrier Global Corp (NYSE:CARR) recently announced a dividend of $0.19 per share, payable on 2024-02-09, with the ex-dividend date set for 2023-12-20. 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 Carrier Global Corp's dividend performance and assess its sustainability.
What Does Carrier Global Corp Do?
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Carrier Global manufactures heating, ventilation, and air conditioning, refrigeration, and fire and security products. The HVAC business serves both residential and commercial markets (HVAC segment sales mix is 60% commercial and 40% residential). Carrier's refrigeration segment consists of its transportation refrigeration, Sensitech supply chain monitoring, and commercial refrigeration businesses. The firm's fire and security business manufactures fire detection and suppression, access controls, and intrusion detection products. In April 2023, Carrier announced that it plans to divest its fire and security and commercial refrigeration businesses. The firm also announced the pending acquisition of Germany-based Viessmann for approximately $13 billion.
A Glimpse at Carrier Global Corp's Dividend History
Carrier Global Corp has maintained a consistent dividend payment record since 2020. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Carrier Global Corp's Dividend Yield and Growth
As of today, Carrier Global Corp currently has a 12-month trailing dividend yield of 1.30% and a 12-month forward dividend yield of 1.34%. This suggests an expectation of increased dividend payments over the next 12 months. Based on Carrier Global Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Carrier Global Corp stock as of today is approximately 1.30%.
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, Carrier Global Corp's dividend payout ratio is 0.50. Carrier Global Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Carrier Global Corp's profitability 7 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported net profit in 6 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. Carrier Global Corp'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 Carrier Global Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Carrier Global Corp's revenue has increased by approximately 3.30% per year on average, a rate that underperforms approximately 50.77% 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, Carrier Global Corp's earnings increased by approximately 17.30% per year on average, a rate that underperforms approximately 34.88% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 15.20%, which underperforms approximately 26.67% of global competitors.
Next Steps
In conclusion, Carrier Global Corp's upcoming dividend payment and its history of consistent dividends reflect a commitment to shareholder returns. The company's forward-looking dividend yield suggests a positive trajectory, while the payout ratio indicates a balance between returning profits to shareholders and retaining earnings for growth. With a solid profitability rank and a growth rank that signals competitive strength, Carrier Global Corp appears to be in a good position to maintain its dividend payments. However, investors should also consider the company's mixed performance in revenue and earnings growth relative to its peers. As Carrier Global Corp continues to evolve, with strategic divestitures and acquisitions, its ability to sustain and grow dividends will be a key factor for investors. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener to find opportunities similar to Carrier Global Corp.
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.
