Warner Music Group Corp's Dividend Analysis
Exploring the Dividend Profile of a Leading Record Label
Warner Music Group Corp (NASDAQ:WMG) recently announced a dividend of $0.17 per share, payable on 2024-03-01, with the ex-dividend date set for 2024-02-21. 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 Warner Music Group Corp's dividend performance and assess its sustainability.
What Does Warner Music Group Corp Do?
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Warner Music Group is the third largest of the three major global record labels, with Vivendi's Universal Music in first and Sony Music in second. Warner's larger segment, recorded music, consists of iconic labels like Atlantic Records, Warner Records, and Parlophone Records and popular artists such as Ed Sheeran, Cardi B, Dua Lipa, and Blake Shelton. Warner Chappell, the firm's publishing arm, is the home to over 65,000 composers and songwriters with over 1 million copyrights represented. Warner is controlled by Access Industries, which owns an 84% economic interest and 99% of voting rights.
A Glimpse at Warner Music Group Corp's Dividend History
Warner Music Group Corp has maintained a consistent dividend payment record since 2020. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Warner Music Group Corp's Dividend Yield and Growth
As of today, Warner Music Group Corp currently has a 12-month trailing dividend yield of 1.86% and a 12-month forward dividend yield of 1.91%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Warner Music Group Corp's annual dividend growth rate was 75.60%. Based on Warner Music Group Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Warner Music Group Corp stock as of today is approximately 1.86%.
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, Warner Music Group Corp's dividend payout ratio is 0.77. This may suggest that the company's dividend may not be sustainable.
Warner Music Group Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Warner Music Group Corp's profitability 6 out of 10 as of 2023-12-31, suggesting fair profitability. The company has reported net profit in 7 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. Warner Music Group 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 Warner Music Group Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Warner Music Group Corp's revenue has increased by approximately 9.80% per year on average, a rate that outperforms approximately 74.55% of global competitors.
Conclusion: Evaluating Warner Music Group Corp's Dividend Outlook
In conclusion, while Warner Music Group Corp's dividend history and recent yield suggest a positive trend, the payout ratio raises questions about long-term sustainability. However, the company's fair profitability and growth metrics offer some reassurance. With a solid revenue model and a competitive position in the global music industry, Warner Music Group Corp might continue to be a noteworthy consideration for dividend-seeking investors. Will the rhythm of Warner Music Group Corp's dividends continue to resonate with the market's tune? Only time will tell. For those interested in exploring further, GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
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.
