RPM International Inc's Dividend Analysis
A Comprehensive Evaluation of the Company's Dividend Performance and Future Prospects
RPM International Inc(NYSE:RPM) recently announced a dividend of $0.46 per share, payable on 2023-10-31, with the ex-dividend date set for 2023-10-17. 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 RPM International Incs dividend performance and assess its sustainability.
What Does RPM International Inc Do?
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RPM International Inc manufactures and sells a variety of paints, coatings, and adhesives. The firm organizes itself into four segments based on product type. The construction products group sells coatings, roofing, insulation, and other products to distributers, contractors, and end consumers globally. The performance coatings group produces coatings that are used in construction and industrial applications like floorings and corrosion control. The consumer group sells paint, finishes, and similar products to individual consumers through hardware and craft stores. The specialty products group sells a variety of products ranging from niche applications of the other groups, to marine finishes, to edible food colorings. The majority of revenue comes from North America.
A Glimpse at RPM International Inc's Dividend History
RPM International Inc has maintained a consistent dividend payment record since 1975. Dividends are currently distributed on a quarterly basis. RPM International Inc has increased its dividend each year since 1975. The stock is thus listed as a dividend aristocrat, an honor that is given to companies that have increased their dividend each year for at least the past 48 years.
Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down RPM International Inc's Dividend Yield and Growth
As of today, RPM International Inc currently has a 12-month trailing dividend yield of 1.75% and a 12-month forward dividend yield of 1.92%. This suggests an expectation of increase dividend payments over the next 12 months.
Over the past three years, RPM International Inc's annual dividend growth rate was 5.10%. Extended to a five-year horizon, this rate increased to 5.40% per year. And over the past decade, RPM International Inc's annual dividends per share growth rate stands at 6.60%.
Based on RPM International Inc's dividend yield and five-year growth rate, the 5-year yield on cost of RPM International Inc stock as of today is approximately 2.28%.
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 2023-08-31, RPM International Inc's dividend payout ratio is 0.42.
RPM International Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks RPM International Inc's profitability 9 out of 10 as of 2023-08-31, suggesting good profitability prospects. The company has reported positive net income for each of 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. RPM International Inc's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and RPM International Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. RPM International Inc's revenue has increased by approximately 10.00% per year on average, a rate that outperforms than approximately 51.79% 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, RPM International Inc's earnings increased by approximately 16.70% per year on average, a rate that outperforms than approximately 55.21% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 13.40%, which outperforms than approximately 57.53% of global competitors.
Next Steps
In conclusion, RPM International Inc's consistent dividend payments, impressive growth rate, reasonable payout ratio, high profitability, and robust growth metrics make it an attractive choice for income investors. The company's commitment to increasing dividends, coupled with its strong financial performance, suggests a bright future for RPM International Inc's dividend sustainability. However, investors should continue to monitor these metrics to ensure the company maintains its strong dividend performance.
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.
