Signet Jewelers Ltd's Dividend Analysis
Exploring the Dividend Performance and Sustainability of Signet Jewelers Ltd
Signet Jewelers Ltd (NYSE:SIG) recently announced a dividend of $0.23 per share, payable on November 24, 2023, with the ex-dividend date set for October 26, 2023. As investors anticipate this upcoming payment, attention also turns to the company's dividend history, yield, and growth rates. Using data from GuruFocus, we delve into Signet Jewelers Ltd's dividend performance and assess its sustainability.
What Does Signet Jewelers Ltd Do?
This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
How to calculate the intrinsic value of a stock?
Signet Jewelers Ltd is a retailer of diamond jewelry. Its product mix includes bridal, fashion, watches, and others. The bridal category includes engagement, wedding, and anniversary purchases. Its segments are the North America segment, the International segment, and the Other segment. The North America segment contributes to the majority of the revenue.
A Glimpse at Signet Jewelers Ltd's Dividend History
Signet Jewelers Ltd has maintained a consistent dividend payment record since 2011. Dividends are currently distributed on a quarterly basis. The chart below shows the annual Dividends Per Share for tracking historical trends.
Breaking Down Signet Jewelers Ltd's Dividend Yield and Growth
As of today, Signet Jewelers Ltd currently has a 12-month trailing dividend yield of 1.23% and a 12-month forward dividend yield of 1.33%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Signet Jewelers Ltd's annual dividend growth rate was -18.50%. Based on Signet Jewelers Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Signet Jewelers Ltd stock as of today is approximately 1.23%.
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 July 31, 2023, Signet Jewelers Ltd's dividend payout ratio is 0.10.
Signet Jewelers Ltd's profitability rank offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Signet Jewelers Ltd's profitability 7 out of 10 as of July 31, 2023, 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. Signet Jewelers Ltd'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 Signet Jewelers Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Signet Jewelers Ltd's revenue has increased by approximately 5.30% per year on average, a rate that outperforms approximately 54.01% 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, Signet Jewelers Ltd's earnings increased by approximately 68.00% per year on average, a rate that outperforms approximately 90.28% of global competitors.
Conclusion
In conclusion, the upcoming dividend payment, consistent dividend history, and promising growth metrics make Signet Jewelers Ltd an attractive option for dividend-focused investors. Despite a negative dividend growth rate over the past three years, the company's robust profitability, low payout ratio, and strong revenue growth suggest a positive outlook for future dividend payments. Investors should continue monitoring Signet Jewelers Ltd's dividend performance and other financial indicators to make informed investment decisions.
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.
