Assessing the Upcoming Dividend and Historical Performance
Comcast Corp (CMCSA, Financial) recently announced a dividend of $0.29 per share, payable on 2024-01-24, with the ex-dividend date set for 2024-01-02. 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 look into Comcast Corp's dividend performance and assess its sustainability.
What Does Comcast Corp Do?
Comcast is made up of three parts. The core cable business owns networks capable of providing television, internet access, and phone services to 62 million U.S. homes and businesses, or nearly half of the country. About 55% of the homes in this territory subscribe to at least one Comcast service. Comcast acquired NBCUniversal from General Electric in 2011. NBCU owns several cable networks, including CNBC, MSNBC, and USA, the NBC broadcast network, the Peacock streaming platform, several local NBC affiliates, Universal Studios, and several theme parks. Sky, acquired in 2018, is the dominant television provider in the U.K. and has invested heavily in proprietary content to build this position. Sky is also the largest pay-television provider in Italy and has a presence in Germany and Austria.
A Glimpse at Comcast Corp's Dividend History
Comcast Corp has maintained a consistent dividend payment record since 2008. Dividends are currently distributed on a quarterly basis. Comcast Corp has increased its dividend each year since 2008. 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 16 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Comcast Corp's Dividend Yield and Growth
As of today, Comcast Corp currently has a 12-month trailing dividend yield of 2.60% and a 12-month forward dividend yield of 2.65%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Comcast Corp's annual dividend growth rate was 8.70%. Extended to a five-year horizon, this rate increased to 10.90% per year. And over the past decade, Comcast Corp's annual dividends per share growth rate stands at an impressive 12.80%. Based on Comcast Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Comcast Corp stock as of today is approximately 4.38%.
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 2023-09-30, Comcast Corp's dividend payout ratio is 0.32.
Comcast Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Comcast Corp's profitability 8 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported positive net income for each 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. Comcast Corp'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 Comcast Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Comcast Corp's revenue has increased by approximately 5.10% per year on average, a rate that outperforms approximately 57.1% 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, Comcast Corp's earnings increased by approximately 1.00% per year on average, a rate that outperforms approximately 41.56% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -6.70%, which outperforms approximately 19.52% of global competitors.
Next Steps
In conclusion, Comcast Corp's dividend payments, dividend growth rate, payout ratio, profitability, and growth metrics paint a comprehensive picture for value investors. The consistent increase in dividend payments, coupled with a manageable payout ratio and strong profitability, suggest that dividends are sustainable. However, investors should also consider the company's growth metrics, as they indicate the potential for future dividend increases and overall financial health. Considering these factors, is Comcast Corp's stock a suitable addition to your dividend-focused portfolio?
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
