Investigating the Sustainability and Growth of Sylvamo Corp's Dividends
Sylvamo Corp (SLVM, Financial) recently announced a dividend of $0.30 per share, payable on 2024-01-25, with the ex-dividend date set for 2024-01-03. 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 Sylvamo Corp's dividend performance and assess its sustainability.
What Does Sylvamo Corp Do?
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.
A Glimpse at Sylvamo Corp's Dividend History
Sylvamo Corp has maintained a consistent dividend payment record since 2022, with dividends currently distributed on a quarterly basis. However, the stock is not yet listed as a dividend king, as it has not increased its dividend each year for at least the past 50 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Sylvamo Corp's Dividend Yield and Growth
As of today, Sylvamo Corp currently has a 12-month trailing dividend yield of 2.14% and a 12-month forward dividend yield of 2.44%, suggesting an expectation of increased 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 2.14%.
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, Sylvamo Corp's dividend payout ratio is 0.16.
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 2023-09-30, suggesting fair profitability. The company has reported net profit in 5 years out of the past 10 years.
Growth Metrics: The Future Outlook
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. Sylvamo Corp's revenue has decreased by approximately -3.70% per year on average, underperforming approximately 85.09% 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 decreased by approximately -4.50% per year on average, underperforming approximately 68.93% of global competitors.
Engaging Conclusion: Dividend Outlook for Sylvamo Corp
Considering Sylvamo Corp's recent dividend announcement, its consistent payment record, and the current yield figures, investors may find the stock to be an attractive option for income generation. However, the sustainability of Sylvamo Corp's dividends is contingent upon the company's future growth prospects and profitability, as indicated by its payout ratio and growth metrics. As value investors continue to seek out stable dividends and growth potential, they will undoubtedly keep a close eye on Sylvamo Corp's performance in these areas. Will Sylvamo Corp's future financial results justify its current dividend policy? That remains a key question for current and potential investors. For those looking to explore further, 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.
