Greenhill & Co Inc's Dividend Performance: A Comprehensive Analysis
Assessing the Sustainability and Growth of GHL's Dividends
Greenhill & Co Inc(NYSE:GHL) recently announced a dividend of $0.1 per share, payable on 2023-09-27, with the ex-dividend date set for 2023-09-12. 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 deep dive into Greenhill & Co Inc's dividend performance and assess its sustainability.
What Does Greenhill & Co Inc Do?
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Greenhill & Co Inc is an independent investment bank that provides financial and strategic advice on significant domestic and cross-border mergers and acquisitions, divestitures, restructurings, financings, capital raising, and other transactions to a diverse client base, including corporations, partnerships, institutions, and governments globally. The company derives revenues from both corporate advisory services related to mergers and acquisitions, financings and restructurings and capital advisory services related to sales or capital raises pertaining to alternative assets.
A Glimpse at Greenhill & Co Inc's Dividend History
Greenhill & Co Inc has maintained a consistent dividend payment record since 2004. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Greenhill & Co Inc's Dividend Yield and Growth
As of today, Greenhill & Co Inc currently has a 12-month trailing dividend yield of 2.71% and a 12-month forward dividend yield of 2.71%. This suggests an expectation of the same dividend payments over the next 12 months.
Over the past three years, Greenhill & Co Inc's annual dividend growth rate was 26.00%. Extended to a five-year horizon, this rate decreased to -16.40% per year. And over the past decade, Greenhill & Co Inc's annual dividends per share growth rate stands at -23.50%.
Based on Greenhill & Co Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Greenhill & Co Inc stock as of today is approximately 1.11%.
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, Greenhill & Co Inc's dividend payout ratio is 0.49.
Greenhill & Co Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Greenhill & Co Inc's profitability 8 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported net profit in 9 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Greenhill & Co Inc's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Greenhill & Co Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Greenhill & Co Inc's revenue has increased by approximately -1.60% per year on average, a rate that underperforms than approximately 67.84% 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, Greenhill & Co Inc's earnings increased by approximately -30.70% per year on average, a rate that underperforms than approximately 87.32% of global competitors.
Conclusion
Despite the challenges, Greenhill & Co Inc has maintained a consistent dividend payment record, showcasing its commitment to reward shareholders. However, the company's declining growth rates and underperformance relative to global competitors raise questions about the sustainability of its dividends in the long run. Investors should closely monitor Greenhill & Co Inc's financial health and growth metrics while considering its dividend potential.
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This article first appeared on GuruFocus.
