Cielo SA's Dividend Analysis
Assessing the Upcoming Dividend and Financial Health of Cielo SA
Cielo SA (CIOXY) recently announced a dividend of $0.03 per share, payable on 2024-05-07, 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 Cielo SA's dividend performance and assess its sustainability.
What Does Cielo SA Do?
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Cielo SA is a Brazil-based provider of payment software and related services to large credit and debit card issuers such as Visa, Mastercard, American Express, and private-label card issuers, including retailers, supermarkets, bookstores, gas stations, and insurance companies. Cielo's offerings capture, process, and manage credit and debit card transactions; accredit merchants; and manage payment accounts. The firm also rents, installs, and maintains point-of-sale terminals.
A Glimpse at Cielo SA's Dividend History
Cielo SA has maintained a consistent dividend payment record since 2010. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Cielo SA's Dividend Yield and Growth
As of today, Cielo SA currently has a 12-month trailing dividend yield of 5.79% and a 12-month forward dividend yield of 7.40%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Cielo SA's annual dividend growth rate was 78.90%. Extended to a five-year horizon, this rate decreased to -21.20% per year. And over the past decade, Cielo SA's annual dividends per share growth rate stands at -13.80%. Based on Cielo SA's dividend yield and five-year growth rate, the 5-year yield on cost of Cielo SA stock as of today is approximately 1.76%.
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, Cielo SA's dividend payout ratio is 0.54. Cielo SA's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Cielo SA's profitability 7 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported net profit in 9 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Cielo SA'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 Cielo SA's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Cielo SA's revenue has increased by approximately -1.70% per year on average, a rate that underperforms than approximately 74.42% 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, Cielo SA's earnings increased by approximately 51.50% per year on average, a rate that underperforms than approximately 11.5% of global competitors.
Next Steps
In conclusion, Cielo SA's consistent dividend history, coupled with a robust dividend yield and a moderate payout ratio, positions it as a potentially attractive option for income-focused investors. However, the mixed signals from the company's dividend growth rate and growth metrics indicate that investors should also consider the underlying financial health and future prospects of Cielo SA. As revenue growth appears to lag behind industry peers, it is crucial to monitor how Cielo SA adapts to industry trends and technological advancements to maintain its dividend payments. With a profitability rank that suggests good prospects, Cielo SA might still offer a balance between income and growth for the discerning investor. 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.
