The Goldman Sachs Group Inc's Dividend Analysis
Assessing the Sustainability and Growth of Goldman Sachs' Dividends
The Goldman Sachs Group Inc (NYSE:GS) recently announced a dividend of $2.75 per share, payable on 2024-03-28, with the ex-dividend date set for 2024-02-28. 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 The Goldman Sachs Group Inc's dividend performance and assess its sustainability.
What Does The Goldman Sachs Group Inc Do?
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Goldman Sachs is a leading global investment banking and asset management firm. Approximately 20% of its revenue comes from investment banking, 45% from trading, 20% from asset management, and 15% from wealth management and retail financial services. Around 60% of the company's net revenue is generated in the Americas, 15% in Asia, and 25% in Europe, the Middle East, and Africa.
A Glimpse at The Goldman Sachs Group Inc's Dividend History
The Goldman Sachs Group Inc has maintained a consistent dividend payment record since 1999, with dividends currently distributed on a quarterly basis. The company has increased its dividend each year since 2010, earning it the status of a dividend achievera distinction for companies that have raised their dividend annually for at least the past 14 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down The Goldman Sachs Group Inc's Dividend Yield and Growth
As of today, The Goldman Sachs Group Inc currently has a 12-month trailing dividend yield of 2.69% and a 12-month forward dividend yield of 2.81%, indicating an expected increase in dividend payments over the next 12 months. Over the past three years, The Goldman Sachs Group Inc's annual dividend growth rate was 28.10%. This rate decreased slightly to 27.90% per year over a five-year horizon, and over the past decade, the annual dividends per share growth rate stands at an impressive 18.00%. Based on The Goldman Sachs Group Inc's dividend yield and five-year growth rate, the 5-year yield on cost of The Goldman Sachs Group Inc stock as of today is approximately 9.21%.
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, The Goldman Sachs Group Inc's dividend payout ratio is 0.40. The Goldman Sachs Group Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks The Goldman Sachs Group Inc's profitability 5 out of 10 as of 2023-12-31, suggesting fair profitability. 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
The Goldman Sachs Group Inc's growth rank of 5 out of 10 suggests that the company has a fair growth outlook. Revenue is the lifeblood of any company, and The Goldman Sachs Group Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. The Goldman Sachs Group Inc's revenue has increased by approximately 2.60% per year on average, though this underperforms approximately 60.3% 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, The Goldman Sachs Group Inc's earnings decreased by approximately -6.10% per year on average, which underperforms approximately 70.44% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 6.10%, underperforms approximately 61.96% of global competitors.
Next Steps
In conclusion, The Goldman Sachs Group Inc's dividend payments, consistent growth rate, and reasonable payout ratio all point to a dividend that is sustainable in the short term. The company's profitability, despite being fair, could be a concern if the downward trend in earnings persists. However, the impressive yield on cost over five years may continue to attract investors seeking income-generating stocks. Investors should also consider The Goldman Sachs Group Inc's growth metrics, which indicate potential challenges ahead. As with any investment, it is crucial to balance the attractive aspects of The Goldman Sachs Group Inc's dividends with a thorough understanding of its overall financial health and market position. 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.
