Halliburton Co's Dividend Analysis
Assessing the Sustainability and Growth of Halliburton Co's Dividends
Halliburton Co (NYSE:HAL) recently announced a dividend of $0.17 per share, payable on 2024-03-27, with the ex-dividend date set for 2024-03-05. 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 Halliburton Co's dividend performance and assess its sustainability.
What Does Halliburton Co Do?
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Halliburton is one of the three largest oilfield service firms in the world, offering superior expertise in a number of business lines, including completion fluids, wireline services, cementing, and countless others. It's the largest pressure pumper in North America, and has been a leading innovator in hydraulic fracturing over the past two decades.
A Glimpse at Halliburton Co's Dividend History
Halliburton Co has maintained a consistent dividend payment record since 1986. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Halliburton Co's Dividend Yield and Growth
As of today, Halliburton Co currently has a 12-month trailing dividend yield of 1.80% and a 12-month forward dividend yield of 1.91%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Halliburton Co's annual dividend growth rate was 26.70%. Extended to a five-year horizon, this rate decreased to -6.50% per year. And over the past decade, Halliburton Co's annual dividends per share growth rate stands at -5.20%.
Based on Halliburton Co's dividend yield and five-year growth rate, the 5-year yield on cost of Halliburton Co stock as of today is approximately 1.29%.
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, Halliburton Co's dividend payout ratio is 0.20.
Halliburton Co's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Halliburton Co's profitability 7 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported net profit in 5 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. Halliburton 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 Halliburton Co's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Halliburton Co's revenue has increased by approximately 15.90% per year on average, outperforming approximately 56.54% 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, Halliburton Co's earnings increased by approximately 59.20% per year on average, outperforming approximately 81.51% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 20.30%, outperforms approximately 67.06% of global competitors.
Investor Considerations for Halliburton Co's Dividend Future
In conclusion, Halliburton Co's commitment to maintaining a steady dividend since 1986, alongside its recent performance indicators, paints a picture of a company dedicated to shareholder returns. The positive trends in dividend growth rates, sustainable payout ratio, and strong profitability and growth metrics provide a reassuring signal for value investors. However, the discerning investor should always consider the broader economic conditions, industry trends, and company-specific developments that could influence future dividend payments. Will Halliburton Co continue to navigate the volatile energy sector and maintain its dividend growth? That remains a key question for investors monitoring the company's performance.
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.
