Papa John's International Inc's Dividend Analysis
Assessing the Sustainability and Growth of Papa John's Dividends
Papa John's International Inc (NASDAQ:PZZA) recently announced a dividend of $0.46 per share, payable on 2024-02-23, with the ex-dividend date set for 2024-02-09. 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 Papa John's International Inc's dividend performance and assess its sustainability.
What Does Papa John's International Inc Do?
This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
How to calculate the intrinsic value of a stock?
Papa John's is one of the largest players in the global QSR pizza market, boasting more than 5,700 restaurants across nearly 50 countries at the end of 2022. The firm operates a predominantly franchised system, owning just shy of 10% of its restaurants and generating revenue from franchise royalties, sales of pizza, and related products at its company-owned stores, and sales from its commissary supply chain. The firm is the third-largest limited-service pizza chain in the U.S. and fourth-largest globally, with a sizable presence in the U.K., China, South Korea, and Chile.
A Glimpse at Papa John's International Inc's Dividend History
Papa John's International Inc has maintained a consistent dividend payment record since 2013, distributing dividends on a quarterly basis. The company is recognized as a dividend achiever, a title awarded to companies that have increased their dividend annually for at least 11 consecutive years. This achievement reflects Papa John's International Inc's commitment to returning value to its shareholders consistently.
Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Papa John's International Inc's Dividend Yield and Growth
As of today, Papa John's International Inc boasts a 12-month trailing dividend yield of 2.35% and a 12-month forward dividend yield of 2.50%. This forward-looking yield indicates an anticipated increase in dividend payments over the next year.
Over the past three years, the company's annual dividend growth rate was 19.60%, which slowed to an 11.20% annual rate over a five-year period. Nonetheless, these growth rates contribute to a 5-year yield on cost of approximately 4.00% for Papa John's International Inc stock as of today.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. Papa John's International Inc's dividend payout ratio is currently 0.69 as of 2023-09-30. A lower ratio suggests that the company retains a significant part of its earnings, which bodes well for future growth and financial stability.
The company's profitability rank is an impressive 8 out of 10, indicating strong earnings potential compared to its peers. Consistent positive net income over the past decade reinforces Papa John's International Inc's robust profitability profile.
Growth Metrics: The Future Outlook
Papa John's International Inc's growth rank of 8 out of 10 reflects a promising growth trajectory. The company's revenue per share and 3-year revenue growth rate of approximately 4.80% per year outperform 65.23% of global competitors.
Papa John's International Inc's earnings have seen an average annual increase of approximately 36.00% over the past three years, outperforming 80.35% of global competitors. The company's 5-year EBITDA growth rate of 11.00% also outperforms 73.15% of global competitors, indicating strong earning potential to support ongoing dividends.
Conclusion: Evaluating Papa John's Dividend Prospects
Considering Papa John's International Inc's consistent dividend growth, reasonable payout ratio, and solid profitability and growth metrics, the company stands as a potentially attractive prospect for value investors focused on dividend income. With the upcoming dividend payment and the company's history of dividend achievements, investors might wonder: Will Papa John's International Inc continue to serve up increasing dividends alongside its pizzas? The financial data certainly provides a savory outlook.
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.
