NEC Corp's Dividend Analysis
Unpacking the Dividend Profile of NEC Corp (NIPNF)
NEC Corp (NIPNF) recently announced a dividend of $0.60 per share, payable on a date yet to be announced, with the ex-dividend date set for 2024-03-28. 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 NEC Corp's dividend performance and assess its sustainability.
What Does NEC Corp Do?
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NEC Corp is a leading Japanese technology firm. It manufactures PCs, computer platforms, semiconductors, and display panels; builds broadband and mobile communication networks; and provides systems-integration services. The firm's research and development has funded accomplishments such as breakthroughs in quantum computing and PDA speech-translation software.
A Glimpse at NEC Corp's Dividend History
NEC Corp has maintained a consistent dividend payment record since 2013. Dividends are currently distributed on a bi-annual basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down NEC Corp's Dividend Yield and Growth
As of today, NEC Corp currently has a 12-month trailing dividend yield of 1.15% and a 12-month forward dividend yield of 1.29%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, NEC Corp's annual dividend growth rate was 16.30%. Extended to a five-year horizon, this rate increased to 18.40% per year. And over the past decade, NEC Corp's annual dividends per share growth rate stands at an impressive 10.20%.
Based on NEC Corp's dividend yield and five-year growth rate, the 5-year yield on cost of NEC Corp stock as of today is approximately 2.68%.
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, NEC Corp's dividend payout ratio is 25%.
NEC Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks NEC Corp's profitability 7 out of 10 as of 2023-12-31, suggesting 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
To ensure the sustainability of dividends, a company must have robust growth metrics. NEC Corp'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 NEC Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. NEC Corp's revenue has increased by approximately 1.00% per year on average, a rate that underperforms approximately 69.37% 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, NEC Corp's earnings increased by approximately 3.30% per year on average, a rate that underperforms approximately 59.98% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 27.20%, which underperforms approximately 21.06% of global competitors.
Next Steps
In conclusion, NEC Corp's dividend payments, dividend growth rate, payout ratio, profitability, and growth metrics paint a picture of a company committed to providing shareholder value through consistent dividends. With a solid track record of profitability and a reasonable payout ratio, NEC Corp appears to be in a good position to maintain or potentially increase its dividend offerings. However, investors should also consider the company's growth metrics and how they may affect future dividend sustainability. As with any investment decision, it's important to conduct thorough research and consider individual financial goals and risk tolerance.
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.
