New World Development Co Ltd's Dividend Analysis
Assessing the Dividend Performance and Sustainability of NDVLY
New World Development Co Ltd (NDVLY) recently announced a dividend of $0.02 per share, payable on 2023-12-27, with the ex-dividend date set for 2023-11-22. 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 New World Development Co Ltd's dividend performance and assess its sustainability.
What Does New World Development Co Ltd Do?
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New World Development, or NWD, is the listed property arm of Chow Tai Fook, owned by the Cheng family. Chow Tai Fook owns a 45% stake in NWD, which mainly engages in residential property development and investment properties of retail malls and offices in Hong Kong and mainland China. NWD also develops high-end hotels across Hong Kong, mainland China and in Southeast Asia. Additionally, NWD holds a 75% interest in New World Department Store China, which operates 24 department stores in mainland China.
A Glimpse at New World Development Co Ltd's Dividend History
New World Development Co Ltd has maintained a consistent dividend payment record since 2003. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down New World Development Co Ltd's Dividend Yield and Growth
As of today, New World Development Co Ltd currently has a 12-month trailing dividend yield of 12.68% and a 12-month forward dividend yield of 4.90%. This suggests an expectation of decreased dividend payments over the next 12 months. Over the past three years, New World Development Co Ltd's annual dividend growth rate was -1.30%. Extended to a five-year horizon, this rate increased to 1.20% per year. And over the past decade, New World Development Co Ltd's annual dividends per share growth rate stands at 3.10%.
Based on New World Development Co Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of New World Development Co Ltd stock as of today is approximately 13.46%.
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 2023-06-30, New World Development Co Ltd's dividend payout ratio is 5.03, which may suggest that the company's dividend is sustainable. New World Development Co Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks New World Development Co Ltd's profitability 7 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. New World Development Co Ltd's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors. New World Development Co Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. New World Development Co Ltd's revenue has increased by approximately 17.90% per year on average, a rate that outperforms approximately 76.28% 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, New World Development Co Ltd's earnings increased by approximately 17.30% per year on average, a rate that outperforms approximately 69.19% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -37.10%, which outperforms approximately 3.81% of global competitors, indicates that while EBITDA has seen a decline, it still fares better than a small percentage of its peers.
Conclusion: Weighing New World Development Co Ltd's Dividend Prospects
In conclusion, New World Development Co Ltd's upcoming dividend, alongside its historical payouts, presents a mixed picture for investors. While the dividend yield remains attractive, the anticipated decrease in dividend payments and the negative three-year dividend growth rate may raise concerns. However, the company's low payout ratio, combined with its strong profitability and revenue growth, suggests that the dividends could be sustainable in the long term. Investors should weigh these factors when considering New World Development Co Ltd as a potential addition to their dividend portfolios.
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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.
