Gerdau SA's Dividend Analysis
Assessing the Sustainability of Gerdau SA's Dividend Payments
Gerdau SA (NYSE:GGB) recently announced a dividend of $0.02 per share, payable on 2024-03-19, with the ex-dividend date set for 2024-03-04. 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 Gerdau SA's dividend performance and assess its sustainability.
What Does Gerdau SA Do?
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Gerdau SA produces steel and steel products. The company operates in civil construction, agriculture, automotive, iron ore, exports, research and development, and home steel products sectors. It offers products such as nails, rebar, columns, billets, slabs, tribar tutor, mechanical construction bars, reinforced steel locks. The company's geographical segment includes Brazil Operations; North America Operations; South America Operations as well as Special Steel Operations. It derives most of the revenue from the Brazil Operations segment.
A Glimpse at Gerdau SA's Dividend History
Gerdau SA has maintained a consistent dividend payment record since 1998. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Gerdau SA's Dividend Yield and Growth
As of today, Gerdau SA currently has a 12-month trailing dividend yield of 7.11% and a 12-month forward dividend yield of 6.76%. This suggests an expectation of decreased dividend payments over the next 12 months.
Over the past three years, Gerdau SA's annual dividend growth rate was 134.80%. Extended to a five-year horizon, this rate decreased to 121.20% per year. And over the past decade, Gerdau SA's annual dividends per share growth rate stands at an impressive 28.40%.
Based on Gerdau SA's dividend yield and five-year growth rate, the 5-year yield on cost of Gerdau SA stock as of today is approximately 376.53%.
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, Gerdau SA's dividend payout ratio is 0.68.
Gerdau SA's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Gerdau SA's profitability 7 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported net profit in 7 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. Gerdau SA'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 Gerdau SA's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Gerdau SA's revenue has increased by approximately 26.40% per year on average, a rate that outperforms approximately 84.39% 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, Gerdau SA's earnings increased by approximately 104.70% per year on average, a rate that outperforms approximately 88.53% of global competitors.
Engaging Conclusion
In conclusion, Gerdau SA's consistent dividend payments, robust growth rate, manageable payout ratio, and strong profitability and growth metrics collectively paint a promising picture for value investors. The company's ability to sustain its dividend in the face of industry trends and economic cycles will continue to be a focal point for shareholders. As Gerdau SA (NYSE:GGB) progresses, will it maintain its appeal as a dividend-paying stock amid changing market conditions? Value investors may find it prudent to monitor these factors closely. For those interested in high-dividend yield stocks, GuruFocus Premium users can utilize the High Dividend Yield Screener for further research and investment opportunities.
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.
