Unveiling the Dividend Dynamics of Wartsila Corp (WRTBY)
Insights into the upcoming dividend, yield, growth rates and sustainability of Wartsila Corp's dividends
Wartsila Corp (WRTBY) recently announced a dividend of $0.03 per share, payable on 2023-10-05, with the ex-dividend date set for 2023-09-12. As investors anticipate this forthcoming payment, attention also turns to the company's dividend history, yield, and growth rates. Utilizing data from GuruFocus, let's delve into Wartsila Corp's dividend performance and evaluate its sustainability.
Introduction to Wartsila Corp
Warning! GuruFocus has detected 8 Warning Signs with WRTBY. Click here to check it out.
This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
How to calculate the intrinsic value of a stock?
Wartsila is a global manufacturer of vital equipment and services for the marine and energy markets with operations in over 70 countries. Approximately half of the group's sales are derived from the sale of services and spare parts through its network of 258 sales and service network locations. Reportable segments include Wartsila Marine Power, Wartsila Marine Systems, Wartsila Voyage, and Wartsila Energy. Additionally, Wartsila reports Wartsila Portfolio Business as other business activities. These segments and other business activities cover both equipment sales and services for the respective business.
Wartsila Corp's Dividend Track Record
Wartsila Corp has maintained a consistent dividend payment record since 2012. Dividends are currently distributed bi-annually. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Understanding Wartsila Corp's Dividend Yield and Growth
As of today, Wartsila Corp has a 12-month trailing dividend yield of 2.13% and a 12-month forward dividend yield of 2.33%. This indicates an expectation of increased dividend payments over the next 12 months. Over the past three years, Wartsila Corp's annual dividend growth rate was -20.60%. Extended to a five-year horizon, this rate increased to -19.40% per year. Over the past decade, Wartsila Corp's annual dividends per share growth rate stands at -0.80%. Given Wartsila Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Wartsila Corp stock as of today is approximately 0.72%.
Assessing Dividend Sustainability: Payout Ratio and Profitability
To evaluate the sustainability of the dividend, one needs to examine 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, Wartsila Corp's dividend payout ratio is 1.30. This may suggest that the company's dividend may not be sustainable.
Wartsila Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Wartsila Corp'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 the past 10 years.
Future Prospects: Growth Metrics
To ensure the sustainability of dividends, a company must have robust growth metrics. Wartsila Corp'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 Wartsila Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Wartsila Corp's revenue has increased by approximately 4.30% per year on average, a rate that underperforms approximately 57.28% of global competitors.
Conclusion
Despite the challenges reflected in Wartsila Corp's negative dividend growth rate and high payout ratio, the company's solid profitability and growth ranks suggest potential for future improvement. Investors should keep a close eye on these metrics while considering the company's dividend prospects. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article first appeared on GuruFocus.
