Unveiling the Dividend Profile of Hurco Companies Inc
A Comprehensive Analysis of Hurco Companies Inc's Dividend Performance and Sustainability
Hurco Companies Inc(NASDAQ:HURC) recently announced a dividend of $0.16 per share, payable on 2023-10-16, with the ex-dividend date set for 2023-09-29. 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 Hurco Companies Incs dividend performance and assess its sustainability.
What Does Hurco Companies Inc Do?
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Hurco Companies Inc is a United States-based industrial technology company. It designs, manufactures, and sells computerized machine tools, consisting mainly of vertical machining centers and turning centers, to companies in the metal working industry through sales, service and distribution network. The company concentrated on designing user-friendly computer control systems that can be operated by both skilled and unskilled machine tool operators. It generates maximum revenue from the Computerized Machine Tools product. Geographically, it derives a majority of revenue from the United States of America. Its product categories include 5-Axis VMC; 3-Axis VMC; Horizontal MC and Turning Centers.
A Glimpse at Hurco Companies Inc's Dividend History
Hurco Companies Inc has maintained a consistent dividend payment record since 2013. Dividends are currently distributed on a quarterly basis. Hurco Companies Inc has increased its dividend each year since 2013. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 10 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Hurco Companies Inc's Dividend Yield and Growth
As of today, Hurco Companies Inc currently has a 12-month trailing dividend yield of 2.89% and a 12-month forward dividend yield of 2.97%. This suggests an expectation of increase dividend payments over the next 12 months. Over the past three years, Hurco Companies Inc's annual dividend growth rate was 7.90%. Extended to a five-year horizon, this rate increased to 8.60% per year.
Based on Hurco Companies Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Hurco Companies Inc stock as of today is approximately 4.37%.
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 2023-07-31, Hurco Companies Inc's dividend payout ratio is 1.19. This may suggest that the company's dividend may not be sustainable.
Hurco Companies Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Hurco Companies Inc's profitability 7 out of 10 as of 2023-07-31, suggesting good profitability prospects. The company has reported net profit in 9 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Hurco Companies Inc'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 Hurco Companies Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Hurco Companies Inc's revenue has increased by approximately -0.70% per year on average, a rate that underperforms than approximately 73.98% 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, Hurco Companies Inc's earnings increased by approximately -21.60% per year on average, a rate that underperforms than approximately 85.61% of global competitors.
Next Steps
In conclusion, Hurco Companies Inc's consistent dividend payments, combined with its dividend growth rate, indicate a commitment to shareholder returns. However, the high payout ratio and underperformance in revenue and earnings growth compared to global competitors cast doubt on the sustainability of future dividends. Therefore, investors should keep a close eye on Hurco's profitability and growth metrics while considering its dividend prospects. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article first appeared on GuruFocus.
