Trinseo PLC (TSE): A Deep Dive into its Dividend Performance and Sustainability
Unravelling the Dividend Story of Trinseo PLC
Trinseo PLC (NYSE:TSE) recently announced a dividend of $0.01 per share, payable on 2023-10-19, with the ex-dividend date set for 2023-10-04. 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 Trinseo PLCs dividend performance and assess its sustainability.
What Does Trinseo PLC Do?
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Trinseo PLC is a leading global materials company and manufacturer of latex and plastics products. The company's operating segments include latex binders, feedstocks, polystyrene, Americas styrenics, engineered materials, and base plastics. The company is a global leader in styrene-butadiene latex and holds a strong market position in Europe and North America. Base plastics is the business line with the highest net sales and contains compounds and blends for automotive and other applications. Europe accounts for the highest net sales by geography and building and construction/sheet accounts for the highest net sales by end market.
A Glimpse at Trinseo PLC's Dividend History
Trinseo PLC has maintained a consistent dividend payment record since 2016. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Trinseo PLC's Dividend Yield and Growth
As of today, Trinseo PLC currently has a 12-month trailing dividend yield of 9.54% and a 12-month forward dividend yield of 0.49%. This suggests an expectation of decrease dividend payments over the next 12 months.
Over the past three years, Trinseo PLC's annual dividend growth rate was -7.20%. Extended to a five-year horizon, this rate increased to -2.10% per year. Based on Trinseo PLC's dividend yield and five-year growth rate, the 5-year yield on cost of Trinseo PLC stock as of today is approximately 8.58%.
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 2023-06-30, Trinseo PLC's dividend payout ratio is 0.00.
Trinseo PLC's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Trinseo PLC's profitability 6 out of 10 as of 2023-06-30, suggesting fair profitability. The company has reported net profit in 7 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Trinseo PLC's growth rank of 6 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and Trinseo PLC's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Trinseo PLC's revenue has increased by approximately 18.60% per year on average, a rate that outperforms than approximately 73.96% of global competitors.
Next Steps
Trinseo PLC's consistent dividend payments, despite the expected decrease in the coming year, coupled with a solid growth outlook, make it a stock to watch for dividend investors. However, the negative dividend growth rate and the low payout ratio warrant a cautious approach. Investors should continue to monitor Trinseo PLC's financial health and growth metrics to ensure the sustainability of its dividends. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article first appeared on GuruFocus.
