UWM Holdings Corp (UWMC): A Comprehensive Analysis of Its Dividend Performance and Sustainability
A deep dive into the dividend history, yield, growth, and sustainability of UWM Holdings Corp (NYSE:UWMC)
UWM Holdings Corp (NYSE:UWMC) recently announced a dividend of $0.1 per share, payable on 2023-10-11, with the ex-dividend date set for 2023-09-19. 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 UWM Holdings Corp's dividend performance and assess its sustainability.
Overview of UWM Holdings Corp
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UWM Holdings Corp engages in the origination, sale and servicing of residential mortgage loans. The company provides independent mortgage advisors across the states and the district of Columbia.
UWM Holdings Corp's Dividend History
UWM Holdings Corp has maintained a consistent dividend payment record since 2021. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Understanding UWM Holdings Corp's Dividend Yield and Growth
As of today, UWM Holdings Corp currently has a 12-month trailing dividend yield of 7.68% and a 12-month forward dividend yield of 7.68%. This suggests an expectation of same dividend payments over the next 12 months.
Based on UWM Holdings Corp's dividend yield and five-year growth rate, the 5-year yield on cost of UWM Holdings Corp stock as of today is approximately 7.44%.
Examining UWM Holdings Corp's 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 2023-06-30, UWM Holdings Corp's dividend payout ratio is 5.71. This may suggest that the company's dividend may not be sustainable.
UWM Holdings Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks UWM Holdings Corp's profitability 1 out of 10 as of 2023-06-30, suggesting the dividend may not be sustainable. The company has reported net profit in 4 years out of past 10 years.
Future Growth Prospects of UWM Holdings Corp
To ensure the sustainability of dividends, a company must have robust growth metrics. UWM Holdings Corp's growth rank of 1 out of 10 suggests that the company has poor growth prospects and thus, the dividend may not be sustainable.
Revenue is the lifeblood of any company, and UWM Holdings Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. UWM Holdings Corp's revenue has increased by approximately 24.30% per year on average, a rate that outperforms than approximately 93.36% 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, UWM Holdings Corp's earnings increased by approximately -51.80% per year on average, a rate that outperforms than approximately 0.68000000000001% of global competitors.
Concluding Thoughts
While UWM Holdings Corp has a history of consistent dividend payments, its low profitability and growth rank, coupled with a high payout ratio, raise questions about the sustainability of its dividends in the long run. Investors should closely monitor the company's revenue and earnings growth, as well as its payout ratio, to make informed decisions about its dividend performance.
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This article first appeared on GuruFocus.
