Gen Digital Inc's Dividend Analysis
Assessing the Sustainability and Growth of Gen Digital Inc's Dividends
Gen Digital Inc (NASDAQ:GEN) recently announced a dividend of $0.13 per share, payable on 2023-12-13, with the ex-dividend date set for 2023-11-17. 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 Gen Digital Inc's dividend performance and assess its sustainability.
What Does Gen Digital Inc Do?
This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
How to calculate the intrinsic value of a stock?
Gen Digital Inc is a cybersecurity pure-play that offers security, identity protection, and privacy solutions to individual consumers. The firm's cyber safety offerings, via brands such as Norton, Avast, and LifeLock, have long maintained their positions as some of the most recognizable consumer-focused security and identity-protection products.
A Glimpse at Gen Digital Inc's Dividend History
Gen Digital Inc has maintained a consistent dividend payment record since 2013, with dividends currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Gen Digital Inc's Dividend Yield and Growth
As of today, Gen Digital Inc has a 12-month trailing dividend yield of 2.46% and a forward dividend yield of 2.46%, suggesting an expectation of the same dividend payments over the next 12 months. Over the past three years, Gen Digital Inc's annual dividend growth rate was 7.70%. Extended to a five-year horizon, this rate increased to 13.10% per year. Based on Gen Digital Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Gen Digital Inc stock as of today is approximately 4.55%.
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 2023-09-30, Gen Digital Inc's dividend payout ratio is 0.22. Gen Digital Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Gen Digital Inc's profitability 7 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported net profit in 9 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. Gen Digital 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 Gen Digital Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Gen Digital Inc's revenue has increased by approximately 11.40% per year on average, outperforming approximately 57.57% 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, Gen Digital Inc's earnings increased by approximately 64.70% per year on average, outperforming approximately 92.94% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 25.90%, outperforms approximately 75.45% of global competitors.
Next Steps
In conclusion, Gen Digital Inc's consistent dividend payments, coupled with a commendable growth rate, payout ratio, profitability, and growth metrics, paint a promising picture for the future of its dividends. Investors may find Gen Digital Inc an attractive option for steady income, with potential for capital appreciation. As the cybersecurity industry evolves and expands, the company's strategic positioning could further reinforce its financial strength and dividend sustainability. For those seeking to diversify their portfolio with high-dividend yield stocks, GuruFocus Premium users can screen for such opportunities using the High Dividend Yield Screener. Will Gen Digital Inc continue to provide a safe harbor for dividend investors in the volatile seas of the stock market? Only time will tell.
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.
