Examining Loblaw Companies Ltd's Dividend History, Yield, and Growth Rates
Loblaw Companies Ltd(LBLCF, Financial) recently announced a dividend of $0.45 per share, payable on 2023-10-01, with the ex-dividend date set for 2023-09-14. 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 Loblaw Companies Ltds dividend performance and assess its sustainability.
Understanding Loblaw Companies Ltd
Loblaw is one of Canada's largest grocery, pharmacy, and general merchandise retailers, operating the most expansive store footprint in Ontario and maintaining sizable presences in provinces like Quebec and British Columbia. Key grocery banners include Loblaw, No Frills, and Maxi, while its pharmaceutical operations are the product of its 2014 acquisition of Shoppers Drug Mart. The firm carries a robust private-label assortment, with top sellers like President's Choice and No Name. In addition to its retail operations, Loblaw oversees a financial-services business, which houses its PC Optimum loyalty program and provides credit card services and guaranteed investment certificates. The firm's controlling shareholder is George Weston, which owns 52.6% of the equity.
A Look at Loblaw Companies Ltd's Dividend History
Loblaw Companies Ltd has maintained a consistent dividend payment record since 2003. Dividends are currently distributed on a quarterly basis. Loblaw Companies Ltd has increased its dividend each year since 2003. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 20 years.
Analysing Loblaw Companies Ltd's Dividend Yield and Growth
As of today, Loblaw Companies Ltd currently has a 12-month trailing dividend yield of 1.41% and a 12-month forward dividend yield of 1.56%. This suggests an expectation of increase dividend payments over the next 12 months. Over the past three years, Loblaw Companies Ltd's annual dividend growth rate was 8.40%. Extended to a five-year horizon, this rate decreased to 7.60% per year. And over the past decade, Loblaw Companies Ltd's annual dividends per share growth rate stands at 5.70%.
Is Loblaw Companies Ltd's Dividend Sustainable?
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, Loblaw Companies Ltd's dividend payout ratio is 0.27.
Loblaw Companies Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Loblaw Companies Ltd's profitability 8 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Examining Loblaw Companies Ltd's Growth Metrics
To ensure the sustainability of dividends, a company must have robust growth metrics. Loblaw Companies Ltd's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Loblaw Companies Ltd's revenue has increased by approximately 9.30% per year on average, a rate that outperforms than approximately 66.9% 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, Loblaw Companies Ltd's earnings increased by approximately 25.60% per year on average, a rate that outperforms than approximately 69.04% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 19.30%, which outperforms than approximately 71.08% of global competitors.
Concluding Remarks
In conclusion, Loblaw Companies Ltd's consistent dividend payments, robust dividend growth rate, healthy payout ratio, high profitability, and strong growth metrics indicate a promising outlook for the company's dividend sustainability. Investors seeking dividend growth may find Loblaw Companies Ltd an attractive option. However, as always, it's essential to conduct thorough research and consider all aspects of a company's financial health before making investment decisions.
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