Lojas Renner SA (LRENY): A Deep Dive into Its Dividend Performance and Sustainability
An in-depth analysis of the company's dividend history, yield, growth rates, payout ratio, and profitability.
Lojas Renner SA (LRENY) recently announced a dividend of $0.04 per share, payable on 0000-00-00, with the ex-dividend date set for 2023-09-29. As investors anticipate this forthcoming payout, attention is also drawn to the company's dividend history, yield, and growth rates. Using data from GuruFocus, we delve into Lojas Renner SA's dividend performance and assess its sustainability.
Company Overview
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Lojas Renner SA operates as a retailer under brand names including Renner, Camicado, and Youcom. The Renner and Youcom stores sell clothing, sports articles, accessories, and cosmetics, while Camicado offers houseware and home decor products. The retail segment of the company generates the majority of its revenue. The company also provides financial products, offering credit cards to its customers. Nearly all of the company's stores and sales are in Brazil.
Lojas Renner SA's Dividend History
Since 2017, Lojas Renner SA has maintained a consistent dividend payment record, distributing dividends on a quarterly basis. The chart below provides a historical view of the company's annual Dividends Per Share.
Breaking Down Lojas Renner SA's Dividend Yield and Growth
As of today, Lojas Renner SA has a 12-month trailing dividend yield of 5.25% and a 12-month forward dividend yield of 5.36%. This indicates an expected increase in dividend payments over the next 12 months.
Lojas Renner SA's dividend yield of 5.25% is near a 10-year high and outshines 81.87% of global competitors in the Retail - Cyclical industry. This suggests that the company's dividend yield is an attractive proposition for income investors.
Over the past three years, Lojas Renner SA's annual dividend growth rate was 10.50%. Over a five-year period, this rate increased to 14.60% per year, and over the past decade, the annual dividends per share growth rate was 7.80%. Based on Lojas Renner SA's dividend yield and five-year growth rate, the 5-year yield on cost of Lojas Renner SA stock as of today is approximately 10.38%.
Is Lojas Renner SA's Dividend Sustainable?
To evaluate the sustainability of the dividend, it's crucial to examine 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, ensuring the availability of funds for future growth and unexpected downturns. As of 2023-06-30, Lojas Renner SA's dividend payout ratio is 0.84, which may suggest that the company's dividend may not be sustainable.
Lojas Renner SA's profitability rank of 9 out of 10 as of 2023-06-30 indicates good profitability prospects. The company has reported positive net income each year over the past decade, further solidifying its high profitability status.
Lojas Renner SA's Growth Metrics
For dividends to be sustainable, a company must demonstrate robust growth metrics. Lojas Renner SA's growth rank of 9 out of 10 suggests a strong growth trajectory relative to its competitors. The company's revenue per share and 3-year revenue growth rate indicate a strong revenue model, with revenue increasing by approximately 6.60% per year on average, outperforming about 59.26% of global competitors.
The company's 3-year EPS growth rate showcases its ability to grow its earnings, a critical component for sustaining dividends in the long run. Over the past three years, Lojas Renner SA's earnings increased by approximately 1.40% per year on average, outperforming about 37.03% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 1.00% outperforms about 34.71% of global competitors.
Conclusion
Lojas Renner SA's consistent dividend payment record, attractive yield, and impressive growth rates make it a noteworthy consideration for income investors. However, its high payout ratio suggests that the sustainability of its dividends may be at risk. Despite this, the company's strong profitability and growth metrics indicate a robust financial position that could support its dividend payments in the long run. As always, investors are advised to conduct their own comprehensive analysis before making investment decisions.
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This article first appeared on GuruFocus.
