Chorus Ltd's Dividend Analysis
Assessing the Upcoming Dividend and Historical Performance of Chorus Ltd (CHRYY)
Chorus Ltd (CHRYY) recently announced a dividend of $0.58 per share, payable on 2024-04-26, with the ex-dividend date set for 2024-03-18. 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 Chorus Ltd's dividend performance and assess its sustainability.
What Does Chorus Ltd Do?
Warning! GuruFocus has detected 10 Warning Signs with CHRYY.
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Chorus is New Zealand's biggest fixed-line communications infrastructure entity, and was demerged in 2011 from Telecom New Zealand. Chorus offers wholesale access to its nationwide copper and fiber network to retail service providers. It also provides backhaul services to retail service providers and connects mobile phone towers. At the end of 2022, Chorus completed the government's rollout of ultra-fast broadband, or UFB, a fiber-to-the-premises network to cover 87% of the population in New Zealand.
A Glimpse at Chorus Ltd's Dividend History
Chorus Ltd has maintained a consistent dividend payment record since 2016. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Chorus Ltd's Dividend Yield and Growth
As of today, Chorus Ltd currently has a 12-month trailing dividend yield of 5.65% and a 12-month forward dividend yield of 5.87%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Chorus Ltd's annual dividend growth rate was 17.40%. Extended to a five-year horizon, this rate decreased to 10.80% per year. Based on Chorus Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Chorus Ltd stock as of today is approximately 9.44%.
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, Chorus Ltd's dividend payout ratio is 9.01, which may suggest that the company's dividend may not be sustainable. Chorus Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Chorus Ltd's profitability 7 out of 10 as of 2023-12-31, 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. Chorus Ltd'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 Chorus Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Chorus Ltd's revenue has increased by approximately -1.50% per year on average, a rate that underperforms than approximately 71.16% 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, Chorus Ltd's earnings increased by approximately -23.40% per year on average, a rate that underperforms than approximately 85.13% of global competitors. Lastly, the company's 5-year EBITDA growth rate of -16.40%, which underperforms than approximately 93.36% of global competitors.
Conclusion: Weighing Chorus Ltd's Dividend Prospects
When considering Chorus Ltd's upcoming dividend, investors should weigh the company's history of consistent dividend payments against the sustainability concerns raised by its payout ratio and mixed growth metrics. While Chorus Ltd's profitability rank and yield on cost are encouraging, the revenue and earnings growth rates present a more cautious outlook. As value investors, it is crucial to evaluate both the rewards and risks associated with Chorus Ltd's dividend profile. With a forward-looking approach and careful analysis, investors can make informed decisions about Chorus Ltd's potential as a dividend-paying stock.
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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.
