Delving into Dine Brands Global Inc's Dividend Performance and Sustainability
A comprehensive analysis of Dine Brands Global Inc's dividend history, yield, growth and future prospects
Dine Brands Global Inc(NYSE:DIN) recently announced a dividend of $0.51 per share, payable on 2023-09-29, with the ex-dividend date set for 2023-09-18. 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 deep dive into Dine Brands Global Inc's dividend performance and assess its sustainability.
Understanding Dine Brands Global Inc's Business Model
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Dine Brands Global Inc owns and franchises thousands of restaurants under the Applebee's and International House of Pancakes names. Almost all company restaurants are located in the United States and franchised. Royalty revenue, which the company gets from franchisees based on franchisees' sales, accounts for roughly three-quarters of total company revenue. The company also earns revenue by leasing restaurant sites to franchisees. The company has four reportable segments Franchise operations, (an aggregation of Applebee's and IHOP franchise operations), Rental operations, Financing operations, and Company-operated restaurant operations. The majority of revenue is derived from the Franchise operations segment.
Tracing Dine Brands Global Inc's Dividend History
Dine Brands Global Inc has maintained a consistent dividend payment record since 2013. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Analyzing Dine Brands Global Inc's Dividend Yield and Growth
As of today, Dine Brands Global Inc currently has a 12-month trailing dividend yield of 3.79% and a 12-month forward dividend yield of 3.79%. This suggests an expectation of same dividend payments over the next 12 months.
Over the past three years, Dine Brands Global Inc's annual dividend growth rate was -10.30%. Extended to a five-year horizon, this rate decreased to -25.20% per year. Based on Dine Brands Global Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Dine Brands Global Inc stock as of today is approximately 0.89%.
Evaluating Dine Brands Global Inc's Dividend Sustainability
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 2023-06-30, Dine Brands Global Inc's dividend payout ratio is 0.41. Dine Brands Global Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Dine Brands Global Inc's profitability 7 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported net profit in 8 years out of past 10 years.
Assessing Dine Brands Global Inc's Growth Metrics
To ensure the sustainability of dividends, a company must have robust growth metrics. Dine Brands Global 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 Dine Brands Global Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Dine Brands Global Inc's revenue has increased by approximately 2.70% per year on average, a rate that outperforms than approximately 64.35% 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, Dine Brands Global Inc's earnings increased by approximately -5.40% per year on average, a rate that outperforms than approximately 35.81% of global competitors.
Conclusion
In conclusion, Dine Brands Global Inc has a solid track record of consistent dividend payments, backed by a strong profitability rank and robust growth metrics. Despite a negative dividend growth rate over the past three to five years, the company's strong revenue model and above-average earnings growth rate suggest potential for future dividend growth. Investors looking for dividend-paying stocks should consider Dine Brands Global Inc, given its dividend performance and growth prospects. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article first appeared on GuruFocus.
