Graham Holdings Co's Dividend Analysis
A Comprehensive Look at GHC's Dividend Performance and Sustainability
Graham Holdings Co(NYSE:GHC) recently announced a dividend of $1.65 per share, payable on 2023-11-02, with the ex-dividend date set for 2023-10-17. 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 delve into Graham Holdings Co's dividend performance and assess its sustainability.
What Does Graham Holdings Co Do?
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Graham Holdings Co. is a diversified education and media company made up of subsidiaries. Firm operations include educational services; television broadcasting; online, print, and local news; home health and hospice care; and manufacturing. The Company segments into the following seven reportable segments: Kaplan International, Higher Education, Supplemental Education, Television Broadcasting, Manufacturing, Healthcare, and Automotive. The majority of revenue comes from the Kaplan International segment, which includes higher education, test preparation, language instruction, and professional training. A significant portion of company revenue also comes from the television broadcasting segment through advertising.
A Glimpse at Graham Holdings Co's Dividend History
Graham Holdings Co has maintained a consistent dividend payment record since 2014. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Graham Holdings Co's Dividend Yield and Growth
As of today, Graham Holdings Co currently has a 12-month trailing dividend yield of 1.11% and a 12-month forward dividend yield of 1.12%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Graham Holdings Co's annual dividend growth rate was 4.40%. Extended to a five-year horizon, this rate stayed the same.
Based on Graham Holdings Co's dividend yield and five-year growth rate, the 5-year yield on cost of Graham Holdings Co stock as of today is approximately 1.38%.
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, Graham Holdings Co's dividend payout ratio is 0.14.
Graham Holdings Co's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Graham Holdings Co's profitability 7 out of 10 as of 2023-06-30, 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. Graham Holdings Co'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 Graham Holdings Co's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Graham Holdings Co's revenue has increased by approximately 13.80% per year on average, a rate that outperforms approximately 68.8% 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, Graham Holdings Co's earnings increased by approximately -39.20% per year on average, a rate that outperforms approximately 10.92% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -15.40%, which outperforms approximately 16.13% of global competitors.
Next Steps
In conclusion, Graham Holdings Co's consistent dividend payments, steady dividend growth rate, low payout ratio, good profitability, and robust growth metrics make it an attractive option for income-focused investors. However, investors should continue to monitor these factors over time to ensure the sustainability of the dividends. 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.
