Unearthing the Dividend Potential of Republic Services Inc (RSG)
An in-depth analysis of the company's dividend performance and sustainability
Republic Services Inc (NYSE:RSG) recently announced a dividend of $0.54 per share, payable on 2023-10-13, with the ex-dividend date set for 2023-09-29. As investors eagerly anticipate this upcoming payment, it's an opportune time to examine the company's dividend history, yield, and growth rates. Leveraging the data from GuruFocus, let's delve into Republic Services Inc's dividend performance and evaluate its sustainability.
About Republic Services Inc
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Republic Services is the second-largest integrated provider of traditional solid waste services in the United States, operating roughly 206 active landfills and 233 transfer stations. The company caters to residential, commercial, and industrial end markets, and also maintains a substantial recycling operation in North America.
Republic Services Inc's Dividend History
Republic Services Inc has upheld a consistent dividend payment record since 2003, with dividends currently distributed on a quarterly basis. The company has increased its dividend each year since 2003, earning it the status of a dividend achieveran accolade bestowed upon companies that have increased their dividend each year for at least the past 20 years.
Republic Services Inc's Dividend Yield and Growth
As of today, Republic Services Inc boasts a 12-month trailing dividend yield of 1.36% and a 12-month forward dividend yield of 1.47%, suggesting an anticipated increase in dividend payments over the next 12 months.
Over the past three years, Republic Services Inc's annual dividend growth rate was 7.00%. Extended to a five-year horizon, this rate increased to 7.40% per year. Over the past decade, the company's annual dividends per share growth rate stands at 7.60%. Based on Republic Services Inc's dividend yield and five-year growth rate, the 5-year yield on cost of the stock as of today is approximately 1.94%.
Assessing Dividend Sustainability: Payout Ratio and Profitability
To assess the sustainability of the dividend, one must 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, Republic Services Inc's dividend payout ratio is 0.40.
Republic Services Inc's profitability rank of 9 out of 10 as of 2023-06-30, suggests good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Republic Services Inc's Growth Metrics
For the sustainability of dividends, a company must have robust growth metrics. Republic Services Inc's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Republic Services Inc's revenue per share and 3-year revenue growth rate indicate a strong revenue model. The company's revenue has increased by approximately 10.10% per year on average, a rate that outperforms approximately 60.61% 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, Republic Services Inc's earnings increased by approximately 12.10% per year on average, a rate that outperforms approximately 54.04% of global competitors.
Finally, the company's 5-year EBITDA growth rate of 5.10%, outperforms approximately 37.27% of global competitors.
Conclusion
Based on the analysis of Republic Services Inc's dividend payments, growth rate, payout ratio, profitability and growth metrics, it is evident that the company has a solid foundation for sustaining and potentially increasing its dividends. The company's consistent dividend growth, coupled with its strong profitability and growth metrics, make it a compelling consideration for income-focused investors. However, investors should always conduct their due diligence and consider their risk tolerance before investing.
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article first appeared on GuruFocus.
