Global Water Resources Inc's Dividend Analysis
Exploring the Sustainability and Growth of Global Water Resources Inc's Dividends
Global Water Resources Inc (NASDAQ:GWRS) recently announced a dividend of $0.03 per share, payable on 2023-10-31, with the ex-dividend date set for 2023-10-16. As investors anticipate this upcoming payment, it's important to examine the company's dividend history, yield, and growth rates. Using data from GuruFocus, we delve into Global Water Resources Inc's dividend performance and assess its sustainability.
What Does Global Water Resources Inc Do?
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Global Water Resources Inc operates as a water resource management company that owns, operates, and manages water, wastewater, and recycled water utilities in strategically located communities, principally in metropolitan Phoenix, Arizona. It operates within the State of Arizona.
A Glimpse at Global Water Resources Inc's Dividend History
Global Water Resources Inc has maintained a consistent dividend payment record since 2016, with dividends currently distributed on a monthly basis. The chart below provides a historical view of the company's annual Dividends Per Share.
Breaking Down Global Water Resources Inc's Dividend Yield and Growth
As of today, Global Water Resources Inc currently has a 12-month trailing dividend yield of 2.92% and a 12-month forward dividend yield of 2.92%. This suggests an expectation of consistent dividend payments over the next 12 months.
Over the past three years, Global Water Resources Inc's annual dividend growth rate was 0.90%. Extended to a five-year horizon, this rate increased to 1.30% per year. Based on Global Water Resources Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Global Water Resources Inc stock as of today is approximately 3.11%.
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 2023-06-30, Global Water Resources Inc's dividend payout ratio is 1.06, which may suggest that the company's dividend may not be sustainable.
Global Water Resources Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Global Water Resources Inc's profitability 7 out of 10 as of 2023-06-30, 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. Global Water Resources Inc's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors. However, the company's 3-year EPS growth rate and 5-year EBITDA growth rate underperform compared to global competitors, indicating areas for potential improvement.
Revenue is the lifeblood of any company, and Global Water Resources Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Global Water Resources Inc's revenue has increased by approximately 5.20% per year on average, a rate that underperforms than approximately 63.09% of global competitors.
Conclusion
In conclusion, while Global Water Resources Inc has maintained a consistent dividend payment record, its high payout ratio and underperformance in certain growth metrics suggest potential challenges in sustaining these dividends in the long run. Investors should closely monitor these factors while considering the company's dividend prospects.
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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.
