VF Corp's Dividend Analysis
Assessing VF Corp's Upcoming Dividend and Historical Performance
VF Corp (NYSE:VFC) recently announced a dividend of $0.09 per share, payable on 2024-03-20, with the ex-dividend date set for 2024-03-08. 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 look into VF Corp's dividend performance and assess its sustainability.
What Does VF Corp Do?
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VF Corp designs, produces, and distributes branded apparel, footwear, and accessories. Its apparel categories are active, outdoor, and work. Its portfolio of about a dozen brands includes Vans, The North Face, Timberland, Supreme, and Dickies. VF Corp markets its products in the Americas, Europe, and Asia-Pacific through wholesale sales to retailers, e-commerce, and branded stores owned by the company and partners. The company has grown through multiple acquisitions and traces its roots to 1899.
A Glimpse at VF Corp's Dividend History
VF Corp has maintained a consistent dividend payment record since 1973. Dividends are currently distributed on a quarterly basis.
VF Corp has increased its dividend each year since 1973. The stock is thus listed as a dividend king, an honor that is given to companies that have increased their dividend each year for at least the past 51 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down VF Corp's Dividend Yield and Growth
As of today, VF Corp currently has a 12-month trailing dividend yield of 6.16% and a 12-month forward dividend yield of 2.23%. This suggests an expectation of decreased dividend payments over the next 12 months.
Over the past three years, VF Corp's annual dividend growth rate was -1.60%. Based on VF Corp's dividend yield and five-year growth rate, the 5-year yield on cost of VF Corp stock as of today is approximately 6.16%.
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 2023-12-31, VF Corp's dividend payout ratio is 1.02, which may suggest that the company's dividend may not be sustainable.
VF Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks VF Corp's profitability 6 out of 10 as of 2023-12-31, suggesting fair profitability. 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. VF Corp's growth rank of 6 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and VF Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. VF Corp's revenue has increased by approximately 4.50% per year on average, a rate that outperforms approximately 53.7% 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, VF Corp's earnings increased by approximately -9.00% per year on average, a rate that outperforms approximately 27.23% of global competitors.
Concluding Thoughts on VF Corp's Dividend Outlook
In conclusion, while VF Corp's long-standing history as a dividend king and its capacity to generate revenue are commendable, the recent negative dividend growth rate and high payout ratio raise concerns about the sustainability of future dividends. The company's profitability and growth metrics provide a mixed outlook, with some strengths in revenue growth but challenges in earnings growth. Value investors may want to closely watch the company's financials in the coming quarters to gauge the potential for consistent dividend payments. For those seeking high-dividend yield stocks, GuruFocus Premium offers the High Dividend Yield Screener as a valuable tool for discovery.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
