Republic Services Inc's Dividend Analysis
Assessing the Sustainability of Republic Services Inc's Dividends
Republic Services Inc (NYSE:RSG) recently announced a dividend of $0.54 per share, payable on 2024-01-16, with the ex-dividend date set for 2023-12-29. 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 Republic Services Inc's dividend performance and assess its sustainability.
What Does Republic Services Inc Do?
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Republic Services is the second-largest integrated provider of traditional solid waste services in the United States, operating roughly 206 active landfills and 233 transfer stations. The company serves residential, commercial, and industrial end markets. It also runs a sizable recycling operation in North America.
A Glimpse at Republic Services Inc's Dividend History
Republic Services Inc has maintained a consistent dividend payment record since 2003. Dividends are currently distributed on a quarterly basis.
Republic Services Inc has increased its dividend each year since 2003. 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 20 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Republic Services Inc's Dividend Yield and Growth
As of today, Republic Services Inc currently has a 12-month trailing dividend yield of 1.24% and a 12-month forward dividend yield of 1.31%. This suggests an expectation of increased dividend payments over the next 12 months.
Republic Services Inc's dividend yield of 1.24% is near a 10-year low and underperforms than 71.19% of global competitors in the Waste Management industry, suggesting that the company's dividend yield may not be a compelling proposition for income investors.
Over the past three years, Republic Services Inc's annual dividend growth rate was 7.00%. Extended to a five-year horizon, this rate increased to 7.40% per year. And over the past decade, Republic Services Inc's annual dividends per share growth rate stands at 7.60%.
Based on Republic Services Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Republic Services Inc stock as of today is approximately 1.77%.
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, Republic Services Inc's dividend payout ratio is 0.39.
Republic Services Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Republic Services Inc'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
To ensure the sustainability of dividends, a company must have robust growth metrics. Republic Services Inc's growth rank of 9 out of 10 suggests that the company's growth trajectory is strong relative to its competitors.
Revenue is the lifeblood of any company, and Republic Services Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Republic Services Inc's revenue has increased by approximately 10.10% per year on average, a rate that outperforms approximately 59.2% 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, Republic Services Inc's earnings increased by approximately 14.30% per year on average, a rate that outperforms approximately 59.63% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 13.80%, which outperforms approximately 53.15% of global competitors.
Next Steps
With a consistent dividend history, a growing dividend payment, and a solid payout ratio, Republic Services Inc presents a compelling case for investors seeking steady income. The company's robust profitability and growth metrics further reinforce the sustainability of its dividends. As investors consider Republic Services Inc for their portfolios, they should weigh these factors along with their personal investment goals and market outlook. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener to find other attractive dividend-paying opportunities.
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.
