Swire Pacific Ltd (SWRAY): A Deep Dive into Its Dividend Performance
Assessing Swire Pacific Ltd's Dividend Sustainability and Growth Prospects
Swire Pacific Ltd (SWRAY) recently announced a dividend of $0.15 per share, payable on 2023-10-23, with the ex-dividend date set for 2023-09-12. 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 Swire Pacific Ltd's dividend performance and assess its sustainability.
A Brief Overview of Swire Pacific Ltd
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Swire Pacific is a Hong Kong-based conglomerate, with interests in property, aviation, beverages, and trading and industrials. The property division, an 82% stake in Swire Properties, contributes more than half of the group's operating profit. The beverage division is one of two Coca-Cola bottlers in mainland China, a bottler in Hong Kong, Taiwan, Vietnam and Cambodia, and in the mid-west and west of the United States. The aviation division consists of Haeco, an aircraft engineering company, and a 45% stake in Cathay Pacific. In 2020, the group ventured into healthcare investments. John Swire and Sons Group, the parent company, holds a 43% stake in Swire Pacific but has 58% of the voting rights through a dual-class share structure.
Swire Pacific Ltd's Dividend History
Swire Pacific Ltd has maintained a consistent dividend payment record since 2003. Dividends are currently distributed on a bi-annual basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Understanding Swire Pacific Ltd's Dividend Yield and Growth
As of today, Swire Pacific Ltd currently has a 12-month trailing dividend yield of 5.23% and a 12-month forward dividend yield of 5.32%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Swire Pacific Ltd's annual dividend growth rate was -4.40%. Extended to a five-year horizon, this rate increased to 1.80% per year. And over the past decade, Swire Pacific Ltd's annual dividends per share growth rate stands at -4.80%.
Based on Swire Pacific Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Swire Pacific Ltd stock as of today is approximately 5.72%.
Examining Swire Pacific Ltd's Dividend Sustainability
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, Swire Pacific Ltd's dividend payout ratio is 0.67.
Swire Pacific Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Swire Pacific Ltd'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.
Swire Pacific Ltd's Growth Metrics and Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Swire Pacific 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 Swire Pacific Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Swire Pacific Ltd's revenue has increased by approximately 107.10% per year on average, a rate that outperforms approximately 97.42% 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, Swire Pacific Ltd's earnings increased by approximately -24.60% per year on average, a rate that outperforms approximately 10.93% of global competitors.
Concluding Thoughts
Based on the analysis of Swire Pacific Ltd's dividend payments, growth rate, payout ratio, profitability, and growth metrics, it appears that the company has a solid foundation for maintaining its dividend payments. The consistent record of dividend payments, combined with good profitability and growth prospects, make Swire Pacific Ltd an attractive option for investors seeking dividend income.
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This article first appeared on GuruFocus.
