Gentex Corp's Dividend Analysis
Insight into Gentex Corp's Upcoming Dividend and Financial Health
Gentex Corp (NASDAQ:GNTX) recently announced a dividend of $0.12 per share, payable on 2024-01-17, with the ex-dividend date set for 2024-01-04. 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 Gentex Corp's dividend performance and assess its sustainability.
What Does Gentex Corp Do?
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Gentex was founded in 1974 to produce smoke-detection equipment. The company sold its first glare-control interior mirror in 1982 and its first model using electrochromic technology in 1987. Automotive revenue is about 98% of total revenue. The company is constantly developing new applications for the technology to remain on top. Sales in 2022 totaled about $1.9 billion with 44.2 million mirrors shipped. The unit mix breaks out as 65% interior and 35% exterior, versus about 32% exterior in 2020. The company is based in Zeeland, Michigan.
A Glimpse at Gentex Corp's Dividend History
Gentex Corp has maintained a consistent dividend payment record since 2003. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Gentex Corp's Dividend Yield and Growth
As of today, Gentex Corp currently has a 12-month trailing dividend yield of 1.48% and a 12-month forward dividend yield of 1.48%. This suggests an expectation of same dividend payments over the next 12 months. Over the past three years, Gentex Corp's annual dividend growth rate was 1.80%. Extended to a five-year horizon, this rate increased to 8.60% per year. And over the past decade, Gentex Corp's annual dividends per share growth rate stands at 7.50%.
Based on Gentex Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Gentex Corp stock as of today is approximately 2.24%.
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, Gentex Corp's dividend payout ratio is 0.28.
Gentex Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Gentex Corp's profitability 9 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported positive net income for each of 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. Gentex Corp's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Gentex Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Gentex Corp's revenue has increased by approximately 4.20% per year on average, a rate that underperforms than approximately 57.36% 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, Gentex Corp's earnings increased by approximately -6.10% per year on average, a rate that underperforms than approximately 70.01% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -1.40%, which underperforms than approximately 61.35% of global competitors.
Next Steps
In conclusion, Gentex Corp's consistent dividend payments and growth rate, combined with a prudent payout ratio and strong profitability rank, paint a picture of a company committed to returning value to its shareholders. However, investors should also consider the growth metrics that suggest mixed performance compared to industry peers. It's crucial to monitor these indicators for any signs of long-term impact on dividend sustainability. As part of a diversified portfolio, Gentex Corp's stock might appeal to investors seeking steady income with a history of dividend reliability. For those looking to explore further, 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.
