MKS Instruments Inc's Dividend Analysis
Assessing the Upcoming Dividend and Historical Performance
MKS Instruments Inc(NASDAQ:MKSI) recently announced a dividend of $0.22 per share, payable on 2023-12-08, with the ex-dividend date set for 2023-11-24. 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 MKS Instruments Incs dividend performance and assess its sustainability.
What Does MKS Instruments Inc Do?
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MKS Instruments Inc is engaged in providing instruments, subsystems, and process control systems used to measure, monitor, deliver, and control parameters of manufacturing processes. The company's product portfolio includes instruments, components, and systems required in manufacturing products such as flat panel displays, medical devices, and electronic materials, among others used in industrial technologies, semiconductor, life and health sciences, and research and defense markets. The company organizes itself into three reportable business segments: Vacuum Solutions, Photonics Solutions, and Materials Solutions. The Vacuum Solutions segment contributes to roughly half of the company's revenue, and the majority of its revenue is earned in the United States.
A Glimpse at MKS Instruments Inc's Dividend History
MKS Instruments Inc has maintained a consistent dividend payment record since 2011. Dividends are currently distributed on a quarterly basis. MKS Instruments Inc has increased its dividend each year since 2011, earning it the status of a dividend achiever. This accolade is reserved for companies with at least a 12-year track record of annual dividend increases. Below is a chart illustrating the annual Dividends Per Share to track historical trends.
Breaking Down MKS Instruments Inc's Dividend Yield and Growth
MKS Instruments Inc currently has a 12-month trailing dividend yield of 1.15% and a 12-month forward dividend yield of 1.15%, indicating an expectation of steady dividend payments over the next year. Over the past three years, MKS Instruments Inc's annual dividend growth rate was 3.20%. This growth rate increased to 4.10% per year over a five-year period, and the company's annual dividends per share growth rate over the past decade stands at 3.70%. The 5-year yield on cost for MKS Instruments Inc stock is approximately 1.41%.
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, MKS Instruments Inc's dividend payout ratio is not applicable (0.00).
MKS Instruments Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks MKS Instruments Inc's profitability 9 out of 10 as of 2023-09-30, 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
MKS Instruments Inc's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors. MKS Instruments Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. The company's revenue has increased by approximately 19.80% per year on average, outperforming approximately 85.45% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, which is critical for sustaining dividends in the long run. During the past three years, MKS Instruments Inc's earnings increased by approximately 25.70% per year on average, outperforming approximately 66.22% of global competitors.
The company's 5-year EBITDA growth rate of 7.80% also outperforms approximately 43.91% of global competitors, indicating a healthy growth trajectory.
Conclusion: Evaluating MKS Instruments Inc's Dividend Prospects
Value investors considering MKS Instruments Inc can be encouraged by its consistent dividend payments, growth in dividends per share, and a strong profitability rank. Despite the current payout ratio being non-applicable, the company's solid financial health and growth metrics suggest a promising outlook for continued dividend sustainability. As MKS Instruments Inc navigates through the complexities of the manufacturing process control industry, it remains to be seen how these factors will influence future dividend payments. Will MKS Instruments Inc continue to provide value to shareholders through its dividend policy? Only time will tell, but the indicators certainly point towards a positive trajectory for income-seeking investors.
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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.
