Assessing the Sustainability and Prospects of Mondi PLC's Dividends
Mondi PLC (MONDY, Financial) recently announced a dividend of $3.51 per share, payable on 2024-02-28, with the ex-dividend date set for 2024-01-25. 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 Mondi PLC's dividend performance and assess its sustainability.
What Does Mondi PLC Do?
Mondi PLC makes and sells packaging and paper products. The company's segment includes Corrugated Packaging; Flexible Packaging and Uncoated Fine Paper. It generates maximum revenue from the Flexible Packaging segment. Flexible Packaging segment includes Kraft paper; Paper bags; Consumer flexibles; Functional paper and films and Pulp. The majority of revenue comes from Europe.
A Glimpse at Mondi PLC's Dividend History
Mondi PLC has maintained a consistent dividend payment record since 2014. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Mondi PLC's Dividend Yield and Growth
As of today, Mondi PLC currently has a 12-month trailing dividend yield of 4.25% and a 12-month forward dividend yield of 4.25%. This suggests an expectation of same dividend payments over the next 12 months.
Over the past three years, Mondi PLC's annual dividend growth rate was -5.90%. Extended to a five-year horizon, this rate increased to -0.10% per year. And over the past decade, Mondi PLC's annual dividends per share growth rate stands at an impressive 10.40%.
Based on Mondi PLC's dividend yield and five-year growth rate, the 5-year yield on cost of Mondi PLC stock as of today is approximately 4.23%.
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, Mondi PLC's dividend payout ratio is 0.43.
Mondi PLC's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Mondi PLC'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. Mondi PLC'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 Mondi PLC's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Mondi PLC's revenue has increased by approximately 7.90% per year on average, a rate that outperforms approximately 53.11% 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, Mondi PLC's earnings increased by approximately 5.20% per year on average, a rate that outperforms approximately 39.71% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -1.50%, which outperforms approximately 27.94% of global competitors.
Next Steps
Considering Mondi PLC's consistent dividend payments, a moderate dividend growth rate, a prudent payout ratio, robust profitability, and favorable growth metrics, investors may find Mondi PLC to be an attractive candidate for their dividend portfolios. While past performance is indicative, it is crucial to monitor the company's future earnings reports and market conditions, which could affect dividend sustainability and growth. For investors seeking to expand their dividend portfolio, GuruFocus Premium users can utilize the High Dividend Yield Screener to discover other high-yielding investment opportunities.
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.
