How does Huhtamaki Oyj's dividend performance fare and what does it mean for its future prospects?
Huhtamaki Oyj (HOYFF, Financial) recently announced a dividend of $0.5 per share, payable on 2023-10-09, with the ex-dividend date set for 2023-09-29. 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 Huhtamaki Oyj's dividend performance and assess its sustainability.
What Does Huhtamaki Oyj Do?
Huhtamäki Oyj is a Finland-based company engaged in manufacturing and selling consumer packaging products. The company operates in three segments; Fiber Foodservice Europe, Asia, and Oceania segment offer high-quality paperboard and molded fiber packaging for fresh food and beverages, the North America segment serves retail tableware, food service, and consumer goods packaging markets, and The flexible Packaging segment offer light and flexible packaging materials, pouches and labels for food and beverages, coffee packaging, pet food packaging, barrier packaging, retort pouches and packaging for healthcare products.
A Glimpse at Huhtamaki Oyj's Dividend History
Huhtamaki Oyj has maintained a consistent dividend payment record since 2009. Dividends are currently distributed on a bi-annually basis. Huhtamaki Oyj has increased its dividend each year since 2009. 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 14 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Huhtamaki Oyj's Dividend Yield and Growth
As of today, Huhtamaki Oyj currently has a 12-month trailing dividend yield of 3.25% and a 12-month forward dividend yield of 3.46%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Huhtamaki Oyj's annual dividend growth rate was 3.80%. Extended to a five-year horizon, this rate increased to 5.10% per year. And over the past decade, Huhtamaki Oyj's annual dividends per share growth rate stands at 7.30%. Based on Huhtamaki Oyj's dividend yield and five-year growth rate, the 5-year yield on cost of Huhtamaki Oyj stock as of today is approximately 4.17%.
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 2023-06-30, Huhtamaki Oyj's dividend payout ratio is 0.45.
Huhtamaki Oyj's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Huhtamaki Oyj'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.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Huhtamaki Oyj'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 Huhtamaki Oyj's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Huhtamaki Oyj's revenue has increased by approximately 9.50% per year on average, a rate that outperforms than approximately 58.84% 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, Huhtamaki Oyj's earnings increased by approximately 13.20% per year on average, a rate that outperforms than approximately 57.09% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 7.30%, which outperforms than approximately 49.76% of global competitors.
Conclusion
In conclusion, Huhtamaki Oyj's consistent dividend payments, impressive growth rate, sustainable payout ratio, and strong profitability and growth metrics make it an attractive option for investors seeking steady dividend income. Its robust growth metrics further indicate a promising future, potentially making it a great addition to a dividend-focused portfolio. However, investors should continue to monitor these metrics to ensure the sustainability of its dividends.
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