Johnson Matthey PLC's Dividend Analysis
Insights into the Upcoming Dividend and Historical Performance
Johnson Matthey PLC (JMPLY) recently announced a dividend of $0.55 per share, payable on 2024-02-16, with the ex-dividend date set for 2023-12-01. 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 Johnson Matthey PLC's dividend performance and assess its sustainability.
What Does Johnson Matthey PLC Do?
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Based in the U.K., Johnson Matthey is a global leader in the production of emissions catalysts for automobiles and trucks. The company also manufactures industrial catalysts for the chemicals and oil and gas sectors, and a variety of other industrial products derived from platinum-group metals. Johnson Matthey PLC is seeking to be a leader in hydrogen technologies.
A Glimpse at Johnson Matthey PLC's Dividend History
Johnson Matthey PLC has maintained a consistent dividend payment record since 2003. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Johnson Matthey PLC's Dividend Yield and Growth
As of today, Johnson Matthey PLC currently has a 12-month trailing dividend yield of 4.86% and a 12-month forward dividend yield of 4.89%. This suggests an expectation of an increase in dividend payments over the next 12 months. Over the past three years, Johnson Matthey PLC's annual dividend growth rate was -3.90%. Extended to a five-year horizon, this rate increased to -2.40% per year. And over the past decade, Johnson Matthey PLC's annual dividends per share growth rate stands at 1.30%.
Based on Johnson Matthey PLC's dividend yield and five-year growth rate, the 5-year yield on cost of Johnson Matthey PLC stock as of today is approximately 4.30%.
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 2023-09-30, Johnson Matthey PLC's dividend payout ratio is 0.81, which may suggest that the company's dividend may not be sustainable.
Johnson Matthey PLC's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Johnson Matthey PLC's profitability 8 out of 10 as of 2023-09-30, 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. Johnson Matthey PLC'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 Johnson Matthey PLC's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Johnson Matthey PLC's revenue has increased by approximately 2.40% per year on average, a rate that underperforms approximately 73.79% 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, Johnson Matthey PLC's earnings increased by approximately -4.60% per year on average, a rate that underperforms approximately 72.76% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -5.80%, which underperforms approximately 80.81% of global competitors.
Next Steps
Considering Johnson Matthey PLC's dividend payments, dividend growth rate, payout ratio, profitability, and growth metrics, investors should weigh these factors carefully when evaluating the stock's potential as a dividend investment. While the company has a history of consistent dividend payments, recent trends in dividend growth and profitability metrics indicate challenges that could impact future payouts. It is essential to monitor these developments and consider how they align with individual investment strategies.
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.
