Unraveling SFL Corp Ltd's Dividend Dynamics: A Comprehensive Analysis
Insights into the Dividend Performance and Sustainability of SFL Corp Ltd (NYSE:SFL)
SFL Corp Ltd (NYSE:SFL) recently announced a dividend of $0.24 per share, payable on 2023-09-29, with the ex-dividend date set for 2023-09-13. 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 SFL Corp Ltd's dividend performance and assess its sustainability.
Company Overview: SFL Corp Ltd
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SFL Corp Ltd is an international ship owning and chartering company. The company is engaged primarily in the ownership and operation of vessels and offshore related assets and is also involved in the charter, purchase, and sale of assets. Its oil tankers, chemical tankers, and oil product tankers are all double-hull vessels.
Dividend History of SFL Corp Ltd
SFL Corp Ltd has maintained a consistent dividend payment record since 2004. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Assessing SFL Corp Ltd's Dividend Yield and Growth
As of today, SFL Corp Ltd currently has a 12-month trailing dividend yield of 8.38% and a 12-month forward dividend yield of 8.56%. This suggests an expectation of increase dividend payments over the next 12 months.
Over the past three years, SFL Corp Ltd's annual dividend growth rate was -14.30%. Extended to a five-year horizon, this rate decreased to -15.10% per year. And over the past decade, SFL Corp Ltd's annual dividends per share growth rate stands at -6.30%.
Based on SFL Corp Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of SFL Corp Ltd stock as of today is approximately 3.70%.
Evaluating 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, SFL Corp Ltd's dividend payout ratio is 1.02. This may suggest that the company's dividend may not be sustainable.
SFL Corp Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks SFL Corp 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.
Understanding SFL Corp Ltd's Growth Metrics
To ensure the sustainability of dividends, a company must have robust growth metrics. SFL Corp 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 SFL Corp Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. SFL Corp Ltd's revenue has increased by approximately 4.60% per year on average, a rate that underperforms than approximately 51.38% 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, SFL Corp Ltd's earnings increased by approximately 22.60% per year on average, a rate that underperforms than approximately 39.37% of global competitors.
Conclusion
In conclusion, while SFL Corp Ltd has a consistent dividend payment history and a decent dividend yield, the negative dividend growth rate and high payout ratio raise concerns about the sustainability of its dividends. However, the company's good profitability rank and growth metrics offer some optimism. Investors should closely monitor these factors while considering SFL Corp Ltd for their portfolio.
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This article first appeared on GuruFocus.
