An in-depth look at the company's dividend performance and sustainability
Evertz Technologies Ltd (EVTZF, Financial) recently announced a dividend of $0.19 per share, payable on 2023-09-29, with the ex-dividend date set for 2023-09-21. 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 deep dive into Evertz Technologies Ltd's dividend performance and assess its sustainability.
About Evertz Technologies Ltd
Evertz Technologies Ltd is a Canadian provider of telecommunications equipment and technology solutions to the television broadcast and new-media industries. Evertz equipment is used in the production, post-production and transmission of television content. Its solutions are sold to content creators, broadcasters, and service providers looking to support multi-channel digital and high definition television, and next generation Internet Protocol environments. More than half of the firm's revenue is generated in the United States.
Tracing Evertz Technologies Ltd's Dividend History
Evertz Technologies Ltd has maintained a consistent dividend payment record since 2007. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Dissecting Evertz Technologies Ltd's Dividend Yield and Growth
As of today, Evertz Technologies Ltd currently has a 12-month trailing dividend yield of 5.52% and a 12-month forward dividend yield of 5.59%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Evertz Technologies Ltd's annual dividend growth rate was 0.90%. Extended to a five-year horizon, this rate decreased to -0.40% per year. And over the past decade, Evertz Technologies Ltd's annual dividends per share growth rate stands at 0.90%.
Based on Evertz Technologies Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Evertz Technologies Ltd stock as of today is approximately 5.41%.
Can Evertz Technologies Ltd's Dividend Be Sustained?
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 2023-07-31, Evertz Technologies Ltd's dividend payout ratio is 0.87, which may suggest that the company's dividend may not be sustainable.
Evertz Technologies Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Evertz Technologies Ltd's profitability 8 out of 10 as of 2023-07-31, suggesting good profitability prospects. The company has reported positive net income for each of the year over the past decade, further solidifying its high profitability.
Assessing Evertz Technologies Ltd's Growth Metrics
To ensure the sustainability of dividends, a company must have robust growth metrics. Evertz Technologies Ltd's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Evertz Technologies Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Evertz Technologies Ltd's revenue has increased by approximately 1.50% per year on average, a rate that underperforms than approximately 58.8% 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, Evertz Technologies Ltd's earnings increased by approximately -2.30% per year on average, a rate that underperforms than approximately 70.44% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 0.50%, underperforms than approximately 73.02% of global competitors.
Conclusion
While Evertz Technologies Ltd has a commendable dividend history and an attractive yield, its payout ratio and growth metrics suggest that the sustainability of its dividends may be questionable. The company's profitability rank is high, indicating good earnings prowess. However, its growth rank and the growth rates of revenue, EPS, and EBITDA suggest a mixed outlook. Therefore, investors should carefully consider these factors before making investment decisions.
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