A Comprehensive Review of Sylvamo Corp's Dividend Performance and Future Outlook
Sylvamo Corp(SLVM, Financial) recently announced a dividend of $0.3 per share, payable on 2023-10-17, with the ex-dividend date set for 2023-10-02. 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 Sylvamo Corps dividend performance and assess its sustainability.
Introducing Sylvamo Corp
Sylvamo Corp is an uncoated papers company with a broad portfolio of top-tier brands and low-cost, large-scale paper mills. It produces uncoated freesheet (UFS) for paper products such as cut size and offset paper, as well as market pulp. The company offers Copy and Printer papers, Commercial Printing papers, Converting papers, and Specialty papers. It operates in three geographical segments: Europe, Latin America, and North America.
Reviewing Sylvamo Corp's Dividend History
Sylvamo Corp has maintained a consistent dividend payment record since 2022. Dividends are currently distributed on a quarterly basis. Sylvamo Corp has increased its dividend each year since -. The stock is thus listed as a dividend king, an honor that is given to companies that have increased their dividend each year for at least the past 2023 years.
Unpacking Sylvamo Corp's Dividend Yield and Growth
As of today, Sylvamo Corp currently has a 12-month trailing dividend yield of 1.96% and a 12-month forward dividend yield of 2.73%. This suggests an expectation of increase dividend payments over the next 12 months.
Based on Sylvamo Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Sylvamo Corp stock as of today is approximately 1.96%.
Assessing Dividend Sustainability: 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, Sylvamo Corp's dividend payout ratio is 0.11.
Sylvamo Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Sylvamo Corp's profitability 6 out of 10 as of 2023-06-30, suggesting fair profitability. The company has reported net profit in 5 years out of past 10 years.
Evaluating Growth Metrics for Future Dividend Sustainability
To ensure the sustainability of dividends, a company must have robust growth metrics. Sylvamo Corp's growth rank of 6 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and Sylvamo Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Sylvamo Corp's revenue has increased by approximately -3.70% per year on average, a rate that underperforms than approximately 84.93% 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, Sylvamo Corp's earnings increased by approximately -3.90% per year on average, a rate that underperforms than approximately 73.68% of global competitors.
Conclusion
Sylvamo Corp's consistent dividend payments, fair profitability, and growth metrics suggest a potential for sustainable dividends in the future. However, investors should consider the company's underperformance in revenue and earnings growth compared to global competitors. As always, it's crucial to conduct thorough research and consider all factors when making investment decisions.
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