Smurfit Kappa Group PLC (SMFKY): A Deep Dive into Its Dividend Performance and Sustainability
Unpacking the Dividend History, Yield, and Growth Rate of Smurfit Kappa Group PLC (SMFKY)
Smurfit Kappa Group PLC (SMFKY) recently announced a dividend of $0.36 per share, payable on 2023-11-13, with the ex-dividend date set for 2023-09-28. 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 deep dive into Smurfit Kappa Group PLC's dividend performance and assess its sustainability.
Introduction to Smurfit Kappa Group PLC
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Smurfit Kappa Group PLC manufactures and sells paper-based packaging products. The company owns mills that produce containerboard, which is then shipped to the company's plants, where it is converted into corrugated packaging products. The packaging products include solid board, sack kraft paper, and folding cartons. The firm organizes itself into two segments based on geography: Europe and the Americas. The Europe segment generates the majority of the revenue. The Americas segment owns forestland in Latin America, where Smurfit Kappa harvests timber for its mills.
Exploring Smurfit Kappa Group PLC's Dividend History
Smurfit Kappa Group PLC has maintained a consistent dividend payment record since 2014. Dividends are currently distributed on a bi-annual basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Understanding Smurfit Kappa Group PLC's Dividend Yield and Growth
As of today, Smurfit Kappa Group PLC currently has a 12-month trailing dividend yield of 4.50% and a 12-month forward dividend yield of 4.61%. This suggests an expectation of increased dividend payments over the next 12 months. Smurfit Kappa Group PLC's dividend yield of 4.50% is near a 10-year high and outperforms than 76.26 of global competitors in the Packaging & Containers industry, suggesting that the company's dividend yield stands out as an attractive proposition for income investors.
Over the past three years, Smurfit Kappa Group PLC's annual dividend growth rate was 8.50%. Extended to a five-year horizon, this rate increased to 9.50% per year. And over the past decade, Smurfit Kappa Group PLC's annual dividends per share growth rate stands at an impressive 17.60%.
Based on Smurfit Kappa Group PLC's dividend yield and five-year growth rate, the 5-year yield on cost of Smurfit Kappa Group PLC stock as of today is approximately 7.08%.
Assessing Dividend Sustainability: 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 2023-06-30, Smurfit Kappa Group PLC's dividend payout ratio is 0.42.
Smurfit Kappa Group PLC's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Smurfit Kappa Group PLC's profitability 7 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported net profit in 9 years out of past 10 years.
Looking at Growth Metrics for Future Prospects
To ensure the sustainability of dividends, a company must have robust growth metrics. Smurfit Kappa Group PLC'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 Smurfit Kappa Group PLC's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Smurfit Kappa Group PLC's revenue has increased by approximately 8.90% per year on average, a rate that outperforms than approximately 56.63% 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, Smurfit Kappa Group PLC's earnings increased by approximately 21.80% per year on average, a rate that outperforms than approximately 67.23% of global competitors.
Conclusion
In conclusion, Smurfit Kappa Group PLC demonstrates a strong dividend performance with a consistent growth rate and a sustainable payout ratio. The company's robust profitability and growth metrics further bolster its ability to maintain and increase dividend payments in the future. Therefore, Smurfit Kappa Group PLC presents an attractive proposition for income investors seeking steady dividend income.
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This article first appeared on GuruFocus.
