Ryder System Inc's Dividend Analysis
Exploring the Dividend Profile of Ryder System Inc (NYSE:R)
Ryder System Inc (NYSE:R) recently announced a dividend of $0.71 per share, payable on 2023-12-15, with the ex-dividend date set for 2023-11-17. 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 Ryder System Inc's dividend performance and assess its sustainability.
What Does Ryder System Inc Do?
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Ryder System Inc operates in three business segments: (1) Fleet Management Solutions which provides full-service leasing and leasing with flexible maintenance options, commercial rental and maintenance services of trucks, tractors and trailers to customers; (2) Supply Chain Solutions (SCS), which provides integrated logistics solutions, including distribution management, dedicated transportation, transportation management, brokerage, e-commerce, last mile, and professional services; and (3) Dedicated Transportation Solutions (DTS), which provides turnkey transportation solutions in the U.S., including dedicated vehicles, professional drivers, management, and administrative support.
A Glimpse at Ryder System Inc's Dividend History
Ryder System Inc has maintained a consistent dividend payment record since 1986. Dividends are currently distributed on a quarterly basis. Ryder System Inc has increased its dividend each year since 1996. 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 27 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Ryder System Inc's Dividend Yield and Growth
As of today, Ryder System Inc currently has a 12-month trailing dividend yield of 2.43% and a 12-month forward dividend yield of 2.67%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Ryder System Inc's annual dividend growth rate was 2.90%. Extended to a five-year horizon, this rate increased to 4.90% per year. And over the past decade, Ryder System Inc's annual dividends per share growth rate stands at 7.50%. Based on Ryder System Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Ryder System Inc stock as of today is approximately 3.09%.
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, Ryder System Inc's dividend payout ratio is 0.25.
Ryder System Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Ryder System Inc's profitability 7 out of 10 as of 2023-09-30, 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. Ryder System 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 Ryder System Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Ryder System Inc's revenue has increased by approximately 11.40% per year on average, a rate that outperforms approximately 70.68% 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, Ryder System Inc's earnings increased by approximately 153.10% per year on average, a rate that outperforms approximately 98% of global competitors.
Concluding Insights on Ryder System Inc's Dividend Prospects
In conclusion, Ryder System Inc's consistent dividend payments, robust growth in dividend per share, and a prudent payout ratio speak to the company's commitment to shareholder returns. Coupled with a solid profitability rank and promising growth metrics, Ryder System Inc appears to be on a sustainable path to maintain, if not enhance, its dividend aristocrat status. As value investors consider the future prospects of their investments, Ryder System Inc's financial health and dividend profile may offer an attractive opportunity for those seeking steady income streams. Will Ryder System Inc continue its dividend growth streak, and how might its strategic initiatives impact future payouts? These are critical considerations for investors eyeing long-term value.
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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.
