Exploring the Dividend Profile of UBS Group AG
UBS Group AG (UBS, Financial) recently announced a dividend of $0.35 per share, payable on 2024-05-03, with the ex-dividend date set for 2024-05-01. 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 UBS Group AG's dividend performance and assess its sustainability.
What Does UBS Group AG Do?
The core of UBS Group AG is its global wealth management business focusing on high and ultra-high-net-worth individuals. UBS Group AG is also a conventional retail and commercial bank in its Swiss home market. Its investment bank and asset management businesses support its wealth management operations, but also leverage its strength in wealth management to serve third-party clients.
A Glimpse at UBS Group AG's Dividend History
UBS Group AG has maintained a consistent dividend payment record since 2012. Dividends are currently distributed on a yearly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down UBS Group AG's Dividend Yield and Growth
As of today, UBS Group AG currently has a 12-month trailing dividend yield of 2.01% and a 12-month forward dividend yield of 1.28%. This suggests an expectation of decreased dividend payments over the next 12 months.
Over the past three years, UBS Group AG's annual dividend growth rate was -9.60%. Extended to a five-year horizon, this rate increased to -9.10% per year. Based on UBS Group AG's dividend yield and five-year growth rate, the 5-year yield on cost of UBS Group AG stock as of today is approximately 1.25%.
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 2023-12-31, UBS Group AG's dividend payout ratio is 0.42.
UBS Group AG's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks UBS Group AG's profitability 6 out of 10 as of 2023-12-31, suggesting fair profitability. 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. UBS Group AG'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 UBS Group AG's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. UBS Group AG's revenue has increased by approximately 10.30% per year on average, a rate that outperforms approximately 63.56% 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, UBS Group AG's earnings increased by approximately 2.10% per year on average, a rate that outperforms approximately 26.74% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 7.30%, which outperforms approximately 50.99% of global competitors.
Next Steps
In conclusion, UBS Group AG's forthcoming dividend payment, consistent historical dividend distribution, and a moderate dividend yield point to a company that values returning capital to shareholders. While the dividend growth rate has seen a decline, the payout ratio and profitability rank indicate a balance between distributing earnings and retaining capital for future investments. The growth metrics, including revenue and EPS growth rates, suggest that UBS Group AG is positioned to maintain its dividend payments while pursuing avenues for expansion. Investors considering UBS Group AG for its dividend prospects should also weigh these factors to make an informed decision. For those seeking additional high-dividend yield opportunities, GuruFocus Premium users can leverage 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.
