Patterson Companies Inc's Dividend Analysis
Unveiling the Dividend Dynamics of Patterson Companies Inc
Patterson Companies Inc (NASDAQ:PDCO) recently announced a dividend of $0.26 per share, payable on 2024-02-02, with the ex-dividend date set for 2024-01-18. 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 Patterson Companies Inc's dividend performance and assess its sustainability.
What Does Patterson Companies Inc Do?
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Patterson Companies Inc is a leading dental distributor and wholesaler of consumable products and equipment operating through two business segments, Patterson Dental, and Patterson Animal Health. The company's segment includes Dental, Animal Health, and Corporate. It generates maximum revenue from the Animal Health segment. Geographically, it derives a majority of its revenue from the United States.
A Glimpse at Patterson Companies Inc's Dividend History
Patterson Companies Inc has maintained a consistent dividend payment record since 2010. Dividends are currently distributed on a quarterly basis. Patterson Companies Inc has increased its dividend each year since 2010. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 14 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Patterson Companies Inc's Dividend Yield and Growth
As of today, Patterson Companies Inc currently has a 12-month trailing dividend yield of 3.53% and a 12-month forward dividend yield of 3.53%. This suggests an expectation of same dividend payments over the next 12 months. And over the past decade, Patterson Companies Inc's annual dividends per share growth rate stands at 5.30%. Based on Patterson Companies Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Patterson Companies Inc stock as of today is approximately 3.53%.
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 2023-10-31, Patterson Companies Inc's dividend payout ratio is 0.51. Patterson Companies Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Patterson Companies Inc's profitability 7 out of 10 as of 2023-10-31, suggesting good profitability prospects. The company has reported net profit in 9 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Patterson Companies Inc'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 Patterson Companies Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Patterson Companies Inc's revenue has increased by approximately 4.30% per year on average, a rate that underperforms than approximately 61.63% 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, Patterson Companies Inc's earnings increased by approximately 42.40% per year on average, a rate that underperforms than approximately 16.88% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 2.20%, which underperforms than approximately 72.88% of global competitors.
Next Steps
Considering Patterson Companies Inc's consistent dividend payments, dividend growth rate, payout ratio, profitability, and growth metrics, investors have several factors to weigh when assessing the company's long-term dividend prospects. While the dividend history is solid, and the payout ratio appears sustainable, the growth rates in revenue, EPS, and EBITDA suggest there may be challenges ahead that could impact future dividend sustainability. Value investors should continue to monitor these metrics closely, as they are indicative of the company's ability to maintain and potentially increase its dividend payments over time. 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.
