Unveiling L'Occitane International SA's Dividend Profile: A Comprehensive Analysis
A deep dive into the dividend performance of L'Occitane International SA (LCCTF) and its sustainability
L'Occitane International SA (LCCTF) recently announced a dividend of $0.26 per share, payable on 2023-10-20, with the ex-dividend date set for 2023-10-03. 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 L'Occitane International SA's dividend performance and assess its sustainability.
Company Overview
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L'Occitane International manufactures and sells beauty and well-being products with natural and organic ingredients. It currently has seven brands: L'Occitane en Provence, Elemis, Sol de Janeiro, Grown Alchemist, Melvita, Erborian, and LimeLife. L'Occitane en Provence is the core brand and contributed 76% to group sales in the financial year ended March 2022. The company sells its products mainly through its own retail stores but also through distributors and other channels. It has a global presence; its top three markets are the United States, Japan, and China.
Dividend History
L'Occitane International SA (LCCTF) has maintained a consistent dividend payment record since 2011. Dividends are currently distributed on a yearly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Dividend Yield and Growth
As of today, L'Occitane International SA (LCCTF) currently has a 12-month trailing dividend yield of 2.19% and a 12-month forward dividend yield of 1.11%. This suggests an expectation of decreased dividend payments over the next 12 months.
Over the past three years, L'Occitane International SA's annual dividend growth rate was 28.00%. Extended to a five-year horizon, this rate decreased to 9.20% per year. And over the past decade, L'Occitane International SA's annual dividends per share growth rate stands at 4.00%.
Based on L'Occitane International SA's dividend yield and five-year growth rate, the 5-year yield on cost of L'Occitane International SA stock as of today is approximately 3.40%.
Assessing Dividend Sustainability
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 2023-03-31, L'Occitane International SA's dividend payout ratio is 0.84. And this may suggest that the company's dividend may not be sustainable.
L'Occitane International SA's profitability rank offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks L'Occitane International SA's profitability 8 out of 10 as of 2023-03-31, suggesting good profitability prospects. The company has reported positive net income for each of the years over the past decade, further solidifying its high profitability.
Understanding Growth Metrics
To ensure the sustainability of dividends, a company must have robust growth metrics. L'Occitane International SA's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and L'Occitane International SA's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. L'Occitane International SA's revenue has increased by approximately 8.10% per year on average, a rate that outperforms approximately 55.2% 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, L'Occitane International SA's earnings increased by approximately -1.10% per year on average, a rate that outperforms approximately 38.53% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 7.40%, outperforms approximately 53.43% of global competitors.
Conclusion
In conclusion, L'Occitane International SA has shown a consistent dividend payment record, a decent dividend yield, and a commendable growth rate. However, the high payout ratio raises concerns about the sustainability of its dividends. On the bright side, the company's profitability rank and growth metrics suggest a positive outlook. Therefore, prospective investors should closely monitor these aspects before making a decision.
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article first appeared on GuruFocus.
