Pernod Ricard SA's Dividend Analysis
Insights into the Upcoming Dividend and Historical Performance
Pernod Ricard SA (PRNDY) recently announced a dividend of $0.56 per share, payable on 2023-12-27, with the ex-dividend date set for 2023-11-21. 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 Pernod Ricard SA's dividend performance and assess its sustainability.
Understanding Pernod Ricard SA's Business
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Pernod Ricard is the world's second-largest spirits maker by volume, behind Diageo. The firm's key markets are Europe, the United States, and Asia. Pernod Ricard's key spirits brands include Absolut vodka, Beefeater gin, Chivas Regal and The Glenlivet scotch whisky, Jameson Irish whiskey, Malibu rum, and Martell cognac. The firm's strategic wine portfolio, which represented around 5% of fiscal 2022 revenue among the group's focus brands, includes Jacob's Creek, Brancott Estate, Campo Viejo, Mumm, and Perrier-Jouet.
Pernod Ricard SA's Dividend Track Record
Pernod Ricard SA has maintained a consistent dividend payment record since 2009. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Dividend Yield and Growth Analysis
As of today, Pernod Ricard SA currently has a 12-month trailing dividend yield of 2.68% and a 12-month forward dividend yield of 2.76%. This suggests an expectation of increased dividend payments over the next 12 months.
Pernod Ricard SA's dividend yield of 2.68% is near a 10-year high and outperforms 53.06% of global competitors in the Beverages - Alcoholic industry, suggesting that the company's dividend yield stands out as an attractive proposition for income investors.
Over the past three years, Pernod Ricard SA's annual dividend growth rate was 35.40%. Extended to a five-year horizon, this rate decreased to 17.20% per year. And over the past decade, Pernod Ricard SA's annual dividends per share growth rate stands at 8.70%.
Based on Pernod Ricard SA's dividend yield and five-year growth rate, the 5-year yield on cost of Pernod Ricard SA stock as of today is approximately 5.93%.
Evaluating Dividend Sustainability
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 2022-12-31, Pernod Ricard SA's dividend payout ratio is 0.44.
Pernod Ricard SA's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Pernod Ricard SA's profitability 8 out of 10 as of 2022-12-31, suggesting good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
The Growth Perspective
To ensure the sustainability of dividends, a company must have robust growth metrics. Pernod Ricard SA's growth rank of 8 out of 10 suggests that the company's growth trajectory is favorable relative to its competitors.
Revenue is the lifeblood of any company, and Pernod Ricard SA's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Pernod Ricard SA's revenue has increased by approximately 6.00% per year on average, outperforming approximately 51.27% 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, Pernod Ricard SA's earnings increased by approximately 9.50% per year on average, outperforming approximately 45.98% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 5.90%, which outperforms approximately 45.38% of global competitors.
Investing in Dividend Sustainability
In conclusion, Pernod Ricard SA's upcoming dividend payment, alongside its historical dividend growth, presents an attractive opportunity for investors seeking income. The company's moderate payout ratio, high profitability rank, and solid growth metrics provide a reassuring picture of dividend sustainability. As Pernod Ricard SA continues to navigate through the competitive landscape of the Beverages - Alcoholic industry, its ability to maintain and potentially increase dividends could offer a compelling reason for investors to consider adding PRNDY to their portfolios. Will Pernod Ricard SA's dividends continue to pour like its finest spirits? Only time will tell, but the current indicators suggest a toast to the company's financial health may be in order.
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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.
