Quanex Building Products Corp's Dividend Analysis
Assessing the Upcoming Dividend Payout and Historical Performance
Quanex Building Products Corp (NYSE:NX) recently announced a dividend of $0.08 per share, payable on 2023-12-29, with the ex-dividend date set for 2023-12-18. 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 Quanex Building Products Corp's dividend performance and assess its sustainability.
What Does Quanex Building Products Corp Do?
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Quanex Building Products Corp is a manufacturer of components sold to original equipment manufacturers in the building products industry. It manufactures engineered products like window components that include flexible insulating glass spacers, extruded vinyl profiles, window and door screens, solar panel sealants, and precision-formed metal and wood products among others. Its three operating segments are North American Fenestration being the key revenue driver, European Fenestration, and North American Cabinet Components. Geographically, it derives a majority of revenue from the United States.
A Glimpse at Quanex Building Products Corp's Dividend History
Quanex Building Products Corp has maintained a consistent dividend payment record since 1989. Dividends are currently distributed on a quarterly basis.
Quanex Building Products Corp has increased its dividend each year since 2009. 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 Quanex Building Products Corp's Dividend Yield and Growth
As of today, Quanex Building Products Corp currently has a 12-month trailing dividend yield of 1.04% and a 12-month forward dividend yield of 1.04%. This suggests an expectation of same dividend payments over the next 12 months.
Extended to a five-year horizon, this rate increased to 6.90% per year. And over the past decade, Quanex Building Products Corp's annual dividends per share growth rate stands at 9.90%.
Based on Quanex Building Products Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Quanex Building Products Corp stock as of today is approximately 1.45%.
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, Quanex Building Products Corp's dividend payout ratio is 0.13.
Quanex Building Products Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Quanex Building Products Corp's profitability 8 out of 10 as of 2023-10-31, suggesting good profitability prospects. The company has reported net profit in 8 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. Quanex Building Products Corp's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Quanex Building Products Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Quanex Building Products Corp's revenue has increased by approximately 9.70% per year on average, a rate that outperforms approximately 69.76% 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, Quanex Building Products Corp's earnings increased by approximately 28.20% per year on average, a rate that outperforms approximately 75.14% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 45.90%, which outperforms approximately 94.32% of global competitors.
Engaging Conclusion: Reflecting on Dividend Stability and Growth Prospects
Considering Quanex Building Products Corp's consistent dividend payments, progressive dividend growth rate, low payout ratio, strong profitability, and robust growth metrics, the company presents an appealing case for value investors focused on dividend income. The question remains: will Quanex Building Products Corp continue to deliver shareholder value through sustainable dividend growth? With the company's solid financial footing and market position, it is well-poised to maintain its dividend achiever status, making it a potential candidate for income-focused portfolios.
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.
