Unpacking the Dividend Performance and Future Prospects of Valmet Corp (VLMTY, Financial)
Valmet Corp (VLMTY) recently announced a dividend of $0.7 per share, payable on 2023-10-26, with the ex-dividend date set for 2023-09-29. This announcement has sparked interest among investors, keen to understand the company's dividend history, yield, and growth rates. Leveraging GuruFocus data, this article provides an in-depth analysis of Valmet Corp's dividend performance and assesses its sustainability.
Valmet Corp: A Brief Introduction
Valmet Corp is a Finland-based company that supplies technologies, automation solutions, and other services to customers in the pulp, paper, and energy industries. The company operates through three segments: Services, Automation, and Process Technologies. The Process Technologies segment, the company's primary revenue generator, provides technology solutions for pulp and energy production, as well as for biomass conversion and emission control. Geographically, it derives a majority of revenue from EMEA followed by North America.
Tracing Valmet Corp's Dividend History
Since 2020, Valmet Corp has maintained a consistent dividend payment record, with dividends distributed bi-annually. The chart below tracks the annual Dividends Per Share to reveal historical trends.
Dissecting Valmet Corp's Dividend Yield and Growth
As of today, Valmet Corp boasts a 12-month trailing dividend yield of 2.79% and a 12-month forward dividend yield of 5.55%. This suggests investors can anticipate increased dividend payments over the next 12 months.
Over the past three years, Valmet Corp's annual dividend growth rate was 22.70%. When extended to a five-year horizon, this rate decreased slightly to 21.90% per year. Accordingly, the 5-year yield on cost of Valmet Corp stock as of today is approximately 7.51%.
Assessing Dividend Sustainability: Payout Ratio and Profitability
The sustainability of a dividend is closely tied to the company's payout ratio. The dividend payout ratio reveals the portion of earnings the company allocates to dividends. A lower ratio suggests the company retains a significant part of its earnings, ensuring funds for future growth and potential downturns. As of 2023-06-30, Valmet Corp's dividend payout ratio is 0.33.
Valmet Corp's profitability rank offers insights into the company's earnings prowess relative to its peers. As of 2023-06-30, Valmet Corp's profitability is ranked 8 out of 10, suggesting strong profitability prospects. The company has reported net profit in 9 out of the past 10 years.
Future Outlook: Growth Metrics
A company must demonstrate strong growth metrics to sustain dividends. Valmet Corp's growth rank of 8 out of 10 suggests a promising growth trajectory relative to its competitors.
Revenue is vital for any company, and Valmet Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a robust revenue model. Valmet Corp's revenue has increased by approximately 6.80% per year on average, a rate that outperforms approximately 51.39% 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. Over the past three years, Valmet Corp's earnings have increased by approximately 12.50% per year on average, a rate that outperforms approximately 51.39% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 20.30% outperforms approximately 72.5% of global competitors, further bolstering its growth prospects.
Concluding Thoughts
Valmet Corp's consistent dividend payments, robust growth rate, reasonable payout ratio, and strong profitability and growth metrics paint a promising picture for its dividend sustainability. However, investors should continue to monitor these metrics and the company's overall performance to make informed investment decisions.
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