Unveiling the Dividend Story of Ennis Inc: An Analysis of its History, Growth, and Sustainability
A comprehensive look into Ennis Inc's dividend performance and what it means for investors
Ennis Inc (NYSE:EBF), a leading manufacturer and supplier of print products for the wholesale trade, recently announced a dividend of $0.25 per share, to be paid on 2023-11-03, with the ex-dividend date set for 2023-10-05. As investors anticipate this upcoming payment, it's crucial to examine Ennis Inc's dividend history, yield, and growth rates. Let's delve into the company's dividend performance and assess its sustainability using data from GuruFocus.
Ennis Inc: A Snapshot
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Ennis Inc is a renowned provider of print products for the wholesale trade. Its diverse product portfolio includes business forms and supplies, commercial printing, eCommerce solutions, envelopes, labels, tags, advertising specialties, and packaging solutions.
Ennis Inc's Dividend Journey
Ennis Inc has maintained a reliable dividend payment record since 1985, with dividends currently distributed on a quarterly basis. The company has increased its dividend each year since 2013, earning it the title of a dividend achiever. This distinction is reserved for companies that have consistently grown their dividends for at least a decade.
Exploring Ennis Inc's Dividend Yield and Growth
Ennis Inc currently boasts a 12-month trailing dividend yield and a 12-month forward dividend yield of 4.70%. This indicates an expectation of stable dividend payments over the next 12 months.
Over the past three years, Ennis Inc's annual dividend growth rate was 3.60%, which increased to 4.70% per year over a five-year period. Over the past decade, the company's annual dividends per share growth rate stands at 6.70%. As of today, the 5-year yield on cost of Ennis Inc stock is approximately 5.91%.
Assessing Dividend Sustainability: Payout Ratio and Profitability
Ennis Inc's dividend payout ratio of 0.57 as of 2023-08-31 offers 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. Furthermore, Ennis Inc's profitability rank of 7 out of 10 suggests good profitability prospects, with the company reporting net profit in 9 of the past 10 years.
Future Prospects: Growth Metrics
Ennis Inc's growth rank of 7 out of 10 suggests a promising growth trajectory relative to its competitors. However, Ennis Inc's 3-year revenue growth rate of -0.40% per year underperforms approximately 73.6% of global competitors. The company's 3-year EPS growth rate of 7.40% per year underperforms approximately 56.67% of global competitors. Lastly, Ennis Inc's 5-year EBITDA growth rate of 1.30% underperforms approximately 67.06% of global competitors.
Wrapping Up
Ennis Inc's consistent dividend payments, coupled with a commendable growth rate, make it an attractive option for dividend-focused investors. However, its underperformance in revenue and EPS growth relative to global competitors warrants a cautious approach. The sustainability of its dividends will largely depend on its ability to maintain profitability and improve growth metrics. Investors should monitor these factors closely while considering Ennis Inc as a potential investment.
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This article first appeared on GuruFocus.
