Steel Dynamics Inc's Dividend Analysis
Assessing the Upcoming Dividend and Financial Health of Steel Dynamics Inc
Steel Dynamics Inc (NASDAQ:STLD) recently announced a dividend of $0.46 per share, payable on 2024-04-14, with the ex-dividend date set for 2024-03-27. 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 Steel Dynamics Inc's dividend performance and assess its sustainability.
What Does Steel Dynamics Inc Do?
This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
How to calculate the intrinsic value of a stock?
Steel Dynamics Inc operates scrap-based steel minimills with roughly 16 million tons of annual steel production capacity. The company's segment includes steel operations, metals recycling operations, steel fabrication operations, Aluminum Operations Segment, and others. It generates maximum revenue from the steel operations segment.
A Glimpse at Steel Dynamics Inc's Dividend History
Steel Dynamics Inc has maintained a consistent dividend payment record since 2004. Dividends are currently distributed on a quarterly basis.
Steel Dynamics Inc has increased its dividend each year since 2010. 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 14 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Steel Dynamics Inc's Dividend Yield and Growth
As of today, Steel Dynamics Inc currently has a 12-month trailing dividend yield of 1.14% and a 12-month forward dividend yield of 1.24%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Steel Dynamics Inc's annual dividend growth rate was 19.30%. Extended to a five-year horizon, this rate decreased to 15.90% per year. And over the past decade, Steel Dynamics Inc's annual dividends per share growth rate stands at an impressive 14.20%.
Based on Steel Dynamics Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Steel Dynamics Inc stock as of today is approximately 2.38%.
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 2023-12-31, Steel Dynamics Inc's dividend payout ratio is 0.12.
Steel Dynamics Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Steel Dynamics Inc's profitability 9 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported net profit in 9 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. Steel Dynamics 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 Steel Dynamics Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Steel Dynamics Inc's revenue has increased by approximately 35.40% per year on average, a rate that outperforms approximately 90.85% 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, Steel Dynamics Inc's earnings increased by approximately 76.50% per year on average, a rate that outperforms approximately 86.76% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 43.30%, which outperforms approximately 84.43% of global competitors.
Conclusion: Evaluating Steel Dynamics Inc's Dividend Prospects
In conclusion, Steel Dynamics Inc's upcoming dividend, consistent growth in dividend payments, modest payout ratio, strong profitability, and robust growth metrics paint a healthy picture for current and prospective investors. With a track record of resilience and growth, Steel Dynamics Inc stands as a potentially attractive option for value investors seeking stable dividend income. Will Steel Dynamics Inc continue to reward shareholders with growing dividends and could it be the steel spine in your investment portfolio?
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.
