Assessing the Dividend Performance and Sustainability of Banco do Brasil SA BB Brasil (BDORY, Financial)
Banco do Brasil SA BB Brasil(BDORY) recently announced a dividend of $0.07 per share, payable on 2023-10-10, with the ex-dividend date set for 2023-09-12. 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 Banco do Brasil SA BB Brasils dividend performance and assess its sustainability.
Understanding Banco do Brasil SA BB Brasil's Business
Banco do Brasil SA BB Brasil is a Brazilian financial services company present in several countries. The business segments are Banking, Investments, Fund Management, Insurance, pension fund & capitalization, Payment methods, and Other segments. Banco do Brasil serves retail clients (small and midsize enterprises and individuals), wholesale clients (corporations), and public institutions. The bank has subsidiaries/ business units/offices in Argentina, Dubai, the United Kingdom, Spain, Mexico, the United States, France, China, and Japan, among other locations. The products and services portfolio includes accounts, Loans, cards, financing, and others.
Tracing Banco do Brasil SA BB Brasil's Dividend History
Banco do Brasil SA BB Brasil has maintained a consistent dividend payment record since 2009. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Deciphering Banco do Brasil SA BB Brasil's Dividend Yield and Growth
As of today, Banco do Brasil SA BB Brasil currently has a 12-month trailing dividend yield of 4.94% and a 12-month forward dividend yield of 4.93%. This suggests an expectation of decrease dividend payments over the next 12 months.
Over the past three years, Banco do Brasil SA BB Brasil's annual dividend growth rate was 12.50%. Extended to a five-year horizon, this rate increased to 27.70% per year. And over the past decade, Banco do Brasil SA BB Brasil's annual dividends per share growth rate stands at 5.20%.
Based on Banco do Brasil SA BB Brasil's dividend yield and five-year growth rate, the 5-year yield on cost of Banco do Brasil SA BB Brasil stock as of today is approximately 16.78%.
Dividend Sustainability: 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, Banco do Brasil SA BB Brasil's dividend payout ratio is 0.33.
Banco do Brasil SA BB Brasil's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Banco do Brasil SA BB Brasil's profitability 6 out of 10 as of 2023-06-30, suggesting fair profitability. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: A Glimpse into the Future
To ensure the sustainability of dividends, a company must have robust growth metrics. Banco do Brasil SA BB Brasil'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 Banco do Brasil SA BB Brasil's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Banco do Brasil SA BB Brasil's revenue has increased by approximately 10.60% per year on average, a rate that outperforms than approximately 70.34% 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, Banco do Brasil SA BB Brasil's earnings increased by approximately 19.00% per year on average, a rate that outperforms than approximately 73.75% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 18.50%, which outperforms than approximately 77.6% of global competitors.
Concluding Remarks
Overall, Banco do Brasil SA BB Brasil's dividend payments, dividend growth rate, payout ratio, and growth metrics indicate a promising outlook for the company. Its consistent dividend payments, fair profitability, and robust growth metrics make it an enticing option for value investors seeking stable dividend income. However, as with any investment, it is crucial to conduct thorough research and consider the company's overall financial health before making an investment decision.
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