Fidelity National Information Services Inc's Dividend Analysis
Understanding FIS's Dividend Trends and Prospects
Fidelity National Information Services Inc (NYSE:FIS) recently announced a dividend of $0.36 per share, payable on 2024-03-22, with the ex-dividend date set for 2024-03-07. 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 Fidelity National Information Services Inc's dividend performance and assess its sustainability.
What Does Fidelity National Information Services Inc Do?
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Fidelity National Information Services Inc's legacy operations provide core processing and ancillary services to banks, but its business has expanded over time. By acquiring Sungard in 2015, the company now provides record-keeping and other services to investment firms. With the acquisition of Worldpay in 2019, FIS now provides payment processing services for merchants and holds leading positions in the United States and United Kingdom. About a fourth of revenue is generated outside North America.
A Glimpse at Fidelity National Information Services Inc's Dividend History
Fidelity National Information Services Inc has maintained a consistent dividend payment record since 2003. Dividends are currently distributed on a quarterly basis. Fidelity National Information Services Inc has increased its dividend each year since 2003. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 21 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Fidelity National Information Services Inc's Dividend Yield and Growth
As of today, Fidelity National Information Services Inc currently has a 12-month trailing dividend yield of 2.94% and a 12-month forward dividend yield of 2.71%. This suggests an expectation of decreased dividend payments over the next 12 months.
Over the past three years, Fidelity National Information Services Inc's annual dividend growth rate was 14.10%. Extended to a five-year horizon, this rate decreased to 10.30% per year. And over the past decade, Fidelity National Information Services Inc's annual dividends per share growth rate stands at 8.50%.
Based on Fidelity National Information Services Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Fidelity National Information Services Inc stock as of today is approximately 4.80%.
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, Fidelity National Information Services Inc's dividend payout ratio is 0.57.
Fidelity National Information Services Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Fidelity National Information Services Inc's profitability 6 out of 10 as of 2023-12-31, suggesting fair profitability. The company has reported net profit in 8 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. Fidelity National Information Services Inc's growth rank of 6 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and Fidelity National Information Services Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Fidelity National Information Services Inc's revenue has increased by approximately -6.00% per year on average, a rate that underperforms approximately 79.98% 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, Fidelity National Information Services Inc's earnings increased by approximately 36.80% per year on average, a rate that underperforms approximately 19.06% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -9.50%, which underperforms approximately 84.02% of global competitors.
Next Steps
In conclusion, Fidelity National Information Services Inc's consistent dividend history and status as a dividend achiever reflect a strong commitment to shareholder returns. However, the forward-looking indicators such as the dividend payout ratio, profitability rank, and growth metrics provide a mixed view on the sustainability of these dividends. While the payout ratio and profitability rank suggest a measure of safety, the growth metrics indicate potential challenges ahead. Investors should weigh these factors when considering the long-term prospects of Fidelity National Information Services Inc's dividend payments. For those seeking additional investment opportunities, 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.
