Orbia Advance Corp SAB de CV's Dividend Analysis
Assessing the Sustainability of Orbia's Upcoming Dividend Payment
Orbia Advance Corp SAB de CV (MXCHF) recently announced a dividend of $0.03 per share, payable on 2023-12-29, with the ex-dividend date set for 2023-12-27. 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 Orbia Advance Corp SAB de CV's dividend performance and assess its sustainability.
What Does Orbia Advance Corp SAB de CV Do?
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Orbia Advance Corp SAB de CV manufactures and sells a variety of chemical-based products and energy. The firm's operating segments are included in five business groups: i) Building and Infrastructure (under the Wavin brand), ii) Connectivity Solutions (under the Dura-Line brand), iii) Precision Agriculture (under the Netafim brand), iv) Fluorinated Solutions (under the Koura brand), and v) Polymer Solutions (under the Vestolit and Alphagary brands). The majority of revenue comes from the USA and Europe.
A Glimpse at Orbia Advance Corp SAB de CV's Dividend History
Orbia Advance Corp SAB de CV has maintained a consistent dividend payment record since 2019. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Orbia Advance Corp SAB de CV's Dividend Yield and Growth
As of today, Orbia Advance Corp SAB de CV currently has a 12-month trailing dividend yield of 5.58% and a 12-month forward dividend yield of 5.56%. This suggests an expectation of slightly decreased dividend payments over the next 12 months. Over the past three years, Orbia Advance Corp SAB de CV's annual dividend growth rate was -11.10%. Extended to a five-year horizon, this rate increased to 8.30% per year. And over the past decade, Orbia Advance Corp SAB de CV's annual dividends per share growth rate stands at 8.10%.
Based on Orbia Advance Corp SAB de CV's dividend yield and five-year growth rate, the 5-year yield on cost of Orbia Advance Corp SAB de CV stock as of today is approximately 8.31%.
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, Orbia Advance Corp SAB de CV's dividend payout ratio is 2.25, which may suggest that the company's dividend may not be sustainable.
Orbia Advance Corp SAB de CV's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Orbia Advance Corp SAB de CV's profitability 9 out of 10 as of 2023-09-30, 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
Robust growth metrics are essential for the sustainability of dividends. Orbia Advance Corp SAB de CV's growth rank of 9 out of 10 suggests that the company's growth trajectory is strong relative to its competitors. The company's revenue per share, combined with the 3-year revenue growth rate, indicates a solid revenue model. Orbia Advance Corp SAB de CV's revenue has increased by approximately 15.20% per year on average, outperforming approximately 66.99% 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, Orbia Advance Corp SAB de CV's earnings increased by approximately 39.20% per year on average, outperforming approximately 77.53% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 23.20% outperforms approximately 72.07% of global competitors.
Engaging Conclusion
In conclusion, while Orbia Advance Corp SAB de CV's dividend payout ratio may raise questions about the sustainability of its dividends, the company's strong profitability rank and positive net income history provide reassurance. Coupled with robust growth metrics, Orbia Advance Corp SAB de CV appears well-positioned to sustain its dividends. However, investors should continue monitoring these factors to ensure the dividends remain a viable component of their investment strategy. Will Orbia maintain its competitive edge and continue to reward shareholders with attractive dividend payments? Only time will tell.
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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.
