An in-depth review of Transcontinental Inc's dividend history, yield, growth rates, and future prospects based on GuruFocus data
Transcontinental Inc(TCLAF, Financial) recently announced a dividend of $0.23 per share, payable on 2023-10-23, 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 Transcontinental Incs dividend performance and assess its sustainability.
What Does Transcontinental Inc Do?
Transcontinental Inc or TC Transcontinental, is a Canadian printer and flexible packaging provider that operates in three segments: packaging, printing, and other. Its packaging segment features the production of different plastic products geared toward consumer goods. Production plants specialize in extrusion, lamination, printing, and converting. The company offers premedia, printing, and distribution services through the printing segment. Publishers, retailers, cataloguers, and marketers are some of the customers who tap TC Transcontinental for these printing solutions. The smaller other segment focuses on the media sector, which generates revenue from print and digital publishing products.
A Glimpse at Transcontinental Inc's Dividend History
Transcontinental Inc has maintained a consistent dividend payment record since 2004. Dividends are currently distributed on a quarterly basis. Transcontinental Inc has increased its dividend each year since 2004. 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 19 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Transcontinental Inc's Dividend Yield and Growth
As of today, Transcontinental Inc currently has a 12-month trailing dividend yield of 7.87% and a 12-month forward dividend yield of 7.83%. This suggests an expectation of decrease dividend payments over the next 12 months.
Over the past three years, Transcontinental Inc's annual dividend growth rate was 1.10%. Extended to a five-year horizon, this rate increased to 2.80% per year. And over the past decade, Transcontinental Inc's annual dividends per share growth rate stands at 5.40%.
Based on Transcontinental Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Transcontinental Inc stock as of today is approximately 9.04%.
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 2023-07-31, Transcontinental Inc's dividend payout ratio is 0.74. And this may suggest that the company's dividend may not be sustainable.
Transcontinental Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Transcontinental Inc's profitability 7 out of 10 as of 2023-07-31, suggesting good profitability prospects. The company has reported net profit in 9 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Transcontinental Inc's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Transcontinental Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Transcontinental Inc's revenue has increased by approximately -0.70% per year on average, a rate that underperforms than approximately 78.73% 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, Transcontinental Inc's earnings increased by approximately -5.00% per year on average, a rate that underperforms than approximately 72.3% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -11.90%, which underperforms than approximately 89.86% of global competitors.
Next Steps
Transcontinental Inc has a strong dividend history and yield, but its payout ratio and growth metrics suggest that the sustainability of its dividends may be at risk. Investors should carefully consider these factors when making investment decisions. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
