H.B. Fuller Co's Dividend Analysis
A Comprehensive Examination of H.B. Fuller Co's Dividend Performance and Sustainability
H.B. Fuller Co (NYSE:FUL) recently announced a dividend of $0.21 per share, payable on 2023-11-02, with the ex-dividend date set for 2023-10-18. 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 H.B. Fuller Co's dividend performance and assess its sustainability.
What Does H.B. Fuller Co Do?
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H.B. Fuller Co is a leading manufacturer and distributor of adhesives, sealants, and other chemical-based products. The company's operations are divided into three business units: constructions, engineering, and hygiene, health and consumable adhesives. The majority of its revenue is generated from the hygiene, health and consumable adhesives unit. The company has a strong presence in the United States and operates in over 35 countries worldwide. H.B. Fuller Co has been focusing on environmentally friendly products, aligning with the growing trend of environmental, social, and governance investing.
A Glimpse at H.B. Fuller Co's Dividend History
H.B. Fuller Co has a long-standing record of consistent dividend payment since 1970, with dividends currently distributed on a quarterly basis. The company has achieved the prestigious status of a dividend king, having increased its dividend each year since 1970. This status is granted to companies that have consistently increased their dividend for at least the past 53 years.
Breaking Down H.B. Fuller Co's Dividend Yield and Growth
As of today, H.B. Fuller Co has a 12-month trailing dividend yield of 1.09% and a 12-month forward dividend yield of 1.11%, indicating an expectation of increased dividend payments over the next 12 months. Over the past three years, H.B. Fuller Co's annual dividend growth rate was 5.10%, which decreased to 4.00% per year over a five-year horizon. Over the past decade, the annual dividends per share growth rate stands at 7.30%. Consequently, the 5-year yield on cost of H.B. Fuller Co stock as of today is approximately 1.33%.
The Sustainability Question: Payout Ratio and Profitability
The sustainability of H.B. Fuller Co's dividend is determined by its payout ratio, which is the portion of earnings distributed as dividends. A lower ratio indicates that the company retains a significant part of its earnings, ensuring the availability of funds for future growth and unexpected downturns. As of 2023-08-31, H.B. Fuller Co's dividend payout ratio is 0.30. Furthermore, H.B. Fuller Co's profitability rank of 8 out of 10 as of 2023-08-31 suggests good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
H.B. Fuller Co's growth rank of 8 out of 10 suggests a promising growth trajectory relative to its competitors. The company's revenue per share and 3-year revenue growth rate indicate a strong revenue model, with an average annual increase of approximately 6.80%. However, this rate underperforms approximately 60% of global competitors. Furthermore, H.B. Fuller Co's 3-year EPS growth rate of approximately 9.00% per year on average underperforms approximately 55.13% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 14.80% underperforms approximately 39.52% of global competitors.
Conclusion
In conclusion, H.B. Fuller Co's consistent dividend payments, respectable dividend growth rate, sustainable payout ratio, high profitability, and promising growth metrics make it an appealing investment for dividend-focused investors. However, it is crucial to continually monitor these factors to ensure the sustainability of dividends in the long run. 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.
