Greif Inc's Dividend Analysis
Understanding Dividend Sustainability and Growth Prospects
Greif Inc (NYSE:GEF) recently announced a dividend of $0.52 per share, payable on 2024-04-01, with the ex-dividend date set for 2024-03-15. 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 Greif Inc's dividend performance and assess its sustainability.
What Does Greif Inc Do?
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Greif Inc is a producer of industrial packaging products and services with manufacturing facilities located in many countries. It offers a comprehensive line of rigid industrial packaging products, such as steel, fiber, and plastic drums, rigid intermediate bulk containers, closure systems for industrial packaging products, transit protection products, water bottles and remanufactured and reconditioned industrial containers, and services, such as container life cycle management, blending, filling, logistics, warehousing, and other packaging services. The company operates in three reportable business segments including Global Industrial Packaging, Paper Packaging and Services, and Land Management. It operates in North and Latin America, Europe, Middle East, Africa and Asia Pacific regions.
A Glimpse at Greif Inc's Dividend History
Greif Inc has maintained a consistent dividend payment record since 1989. Dividends are currently distributed on a quarterly basis.
Greif Inc has increased its dividend each year since 1995. The stock is thus listed as a dividend aristocrat, an honor that is given to companies that have increased their dividend each year for at least the past 29 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Greif Inc's Dividend Yield and Growth
As of today, Greif Inc currently has a 12-month trailing dividend yield of 3.20% and a 12-month forward dividend yield of 3.26%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Greif Inc's annual dividend growth rate was 4.70%. Extended to a five-year horizon, this rate decreased to 3.10% per year. And over the past decade, Greif Inc's annual dividends per share growth rate stands at 1.50%.
Based on Greif Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Greif Inc stock as of today is approximately 3.73%.
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 2024-01-31, Greif Inc's dividend payout ratio is 0.32.
Greif Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Greif Inc's profitability 8 out of 10 as of 2024-01-31, suggesting good profitability prospects. 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
To ensure the sustainability of dividends, a company must have robust growth metrics. Greif 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 Greif Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Greif Inc's revenue has increased by approximately 5.70% per year on average, a rate that underperforms than approximately 54.35% 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, Greif Inc's earnings increased by approximately 28.80% per year on average, a rate that underperforms than approximately 23.81% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 15.80%, which underperforms than approximately 29.22% of global competitors.
Next Steps
In conclusion, Greif Inc's consistent dividend payments, a history of dividend growth, and a healthy payout ratio reflect its commitment to shareholder returns. The company's strong profitability and growth metrics further support the potential for ongoing dividend sustainability. While some growth rates may appear modest in comparison to peers, the overall financial health of Greif Inc suggests that it remains a solid choice for value investors focused on dividend income. As the industrial packaging sector continues to evolve, Greif Inc's adaptability and strategic initiatives will likely play a pivotal role in its future 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.
