Dover Corp's Dividend Analysis
An In-Depth Look at Dover Corp's Upcoming Dividend and Historical Performance
Dover Corp (NYSE:DOV) recently announced a dividend of $0.51 per share, payable on 2024-03-15, with the ex-dividend date set for 2024-02-28. 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 Dover Corp's dividend performance and assess its sustainability.
What Does Dover Corp Do?
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Dover Corp is a diversified manufacturer and solutions provider delivering equipment and components, consumable supplies, aftermarket parts, software digital solutions, and support services. It operates through five segments: engineered systems, clean energy, and fueling solutions, imaging and identification, pumps and process solutions, and climate and sustainability technologies equipment.
A Glimpse at Dover Corp's Dividend History
Dover Corp has maintained a consistent dividend payment record since 1956. Dividends are currently distributed on a quarterly basis.
Dover Corp has increased its dividend each year since 1956. The stock is thus listed as a dividend king, an honor that is given to companies that have increased their dividend each year for at least the past 68 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Dover Corp's Dividend Yield and Growth
As of today, Dover Corp currently has a 12-month trailing dividend yield of 1.24% and a 12-month forward dividend yield of 1.24%. This suggests an expectation of the same dividend payments over the next 12 months.
Over the past three years, Dover Corp's annual dividend growth rate was 1.00%. Extended to a five-year horizon, this rate increased to 1.30% per year. And over the past decade, Dover Corp's annual dividends per share growth rate stands at 3.40%.
Based on Dover Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Dover Corp stock as of today is approximately 1.32%.
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, Dover Corp's dividend payout ratio is 0.26.
Dover Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Dover Corp's profitability 8 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported positive net income for each 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. Dover Corp's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Dover Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Dover Corp's revenue has increased by approximately 9.30% per year on average, a rate that outperforms approximately 56.89% 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, Dover Corp's earnings increased by approximately 23.50% per year on average, a rate that outperforms approximately 66% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 17.40%, which outperforms approximately 69.75% of global competitors, indicates a strong potential for continued financial health and dividend payouts.
Concluding Thoughts on Dover Corp's Dividend Outlook
In conclusion, Dover Corp's forthcoming dividend, along with its historical growth and consistent increases, reflects the company's strong commitment to shareholder returns. The analysis of Dover Corp's payout ratio, profitability, and growth metrics suggests a healthy financial position that bodes well for the sustainability of future dividends. With a robust track record and promising growth prospects, Dover Corp stands out as a potentially attractive investment for value investors focused on dividend income. As always, investors should conduct their due diligence to determine if Dover Corp aligns with their investment strategy and risk tolerance.
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.
