Worley Ltd's Dividend Analysis
Assessing the Sustainability and Growth of Worley Ltd's Dividends
Worley Ltd (WYGPY) recently announced a dividend of $0.16 per share, payable on 2024-04-17, 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 Worley Ltd's dividend performance and assess its sustainability.
What Does Worley Ltd Do?
Warning! GuruFocus has detected 12 Warning Signs with WYGPY.
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Worley is a leading global provider of professional services, such as engineering, procurement, and construction management, to the oil, gas, mining, power, and infrastructure sectors. The purchase of Jacobs ECR in April 2019 reduced revenue contribution from hydrocarbons to just over 50%, from a prior 75%-80% position. Metals and mining contribute 23%, and infrastructure and chemicals the balance. Worley has a global presence with about 59,000 staff in more than 50 countries. It has a strong presence in many developing economies, including Africa.
A Glimpse at Worley Ltd's Dividend History
Worley Ltd has maintained a consistent dividend payment record since 2018. Dividends are currently distributed on a bi-annual basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Worley Ltd's Dividend Yield and Growth
As of today, Worley Ltd currently has a 12-month trailing dividend yield of 2.88% and a 12-month forward dividend yield of 2.83%. This suggests an expectation of decreased dividend payments over the next 12 months. Over the past three years, Worley Ltd's annual dividend growth rate was 7.70%. Extended to a five-year horizon, this rate increased to 34.60% per year. Based on Worley Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Worley Ltd stock as of today is approximately 12.72%.
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, Worley Ltd's dividend payout ratio is 0.87, which may suggest that the company's dividend may not be sustainable. Worley Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Worley Ltd's profitability 6 out of 10 as of 2023-12-31, suggesting fair profitability. The company has reported net profit in 9 out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Worley Ltd'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 Worley Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Worley Ltd's revenue has decreased by approximately -4.90% per year on average, a rate that underperforms approximately 80.3% 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, Worley Ltd's earnings decreased by approximately -14.50% per year on average, a rate that underperforms approximately 82.13% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 3.10%, which underperforms approximately 69.6% of global competitors.
Engaging Conclusion: Weighing Worley Ltd's Dividend Prospects
Considering Worley Ltd's latest dividend announcement, consistent dividend history, and current yield, investors may find it an attractive income-generating stock. However, the sustainability of Worley Ltd's dividends could be a concern given the payout ratio and mixed growth metrics. The company's profitability remains fair, but the declining revenue and earnings growth rates may warrant caution for long-term dividend reliability. As value investors weigh these factors, they should also consider the broader industry trends and company-specific strategic initiatives that could influence future performance. Will Worley Ltd's global footprint and diverse service offerings help it navigate the challenges and maintain its dividend commitment? This is a question for investors to ponder as they assess the company's potential for their portfolios. For further research, 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.
