Fox Corp's Dividend Analysis
Understanding Fox Corp's Dividend Dynamics
Fox Corp (NASDAQ:FOXA) recently announced a dividend of $0.26 per share, payable on 2024-03-26, with the ex-dividend date set for 2024-03-05. 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 Fox Corp's dividend performance and assess its sustainability.
What Does Fox Corp Do?
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Fox Corp represents the assets not sold to Disney by predecessor firm, Twenty First Century Fox, in 2019. The remaining assets include Fox News, the FOX broadcast network, FS1 and FS2, Fox Business, Big Ten Network, 28 owned and operated local television stations of which 17 are affiliated with the Fox Network, Tubi, and the Fox Studios lot. Since the Disney sale, Fox Corp has acquired other related and unrelated assets including Credible Labs, a consumer fintech firm. The Murdoch family continues to control the successor firm, which represents a large-scale bet on the value of live sports and news in the U.S. market.
A Glimpse at Fox Corp's Dividend History
Fox Corp has maintained a consistent dividend payment record since 2019. Dividends are currently distributed on a bi-annual basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Fox Corp's Dividend Yield and Growth
As of today, Fox Corp currently has a 12-month trailing dividend yield of 1.73% and a 12-month forward dividend yield of 1.77%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Fox Corp's annual dividend growth rate was 2.80%. Based on Fox Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Fox Corp stock as of today is approximately 1.73%.
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, Fox Corp's dividend payout ratio is 0.15.
Fox Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Fox Corp's profitability 8 out of 10 as of 2023-12-31, suggesting good profitability prospects. 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. Fox 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 Fox Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Fox Corp's revenue has increased by approximately 12.00% per year on average, a rate that outperforms approximately 77.35% 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, Fox Corp's earnings increased by approximately 12.20% per year on average, a rate that outperforms approximately 56.5% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 2.10%, which outperforms approximately 44.53% of global competitors.
Next Steps
In conclusion, Fox Corp's upcoming dividend payment, consistent dividend growth rate, prudent payout ratio, and strong profitability and growth metrics paint a positive picture for investors seeking stable income. The company's strategic focus on live sports and news, areas with enduring consumer demand, further bolsters confidence in its dividend prospects. Investors interested in high-dividend yield stocks can utilize tools such as the High Dividend Yield Screener offered by GuruFocus to explore similar investment opportunities. With these insights, value investors can make informed decisions regarding Fox Corp's dividend viability and the broader potential of their investment portfolios.
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.
