Exploring the Sustainability and Growth of Orange SA's Dividends
Orange SA (ORAN, Financial) recently announced a dividend of $0.45 per share, payable on 2024-06-21, with the ex-dividend date set for 2024-06-03. 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 Orange SA's dividend performance and assess its sustainability.
What Does Orange SA Do?
Orange is the incumbent telecom operator in France. The company operates fixed and wireless businesses in France, where it is the market leader ahead of Iliad, Bouygues, and SFR. Orange also has fixed and wireless (convergent) operations in Spain, Poland, Belgium, Luxembourg, and Central Europe (Romania, Slovakia, Moldova). Around 15% of revenue comes from emerging African markets, where the company only operates wireless networks, and 20% comes from the enterprise segment, which serves companies with more than 50 employees in France and internationally.
A Glimpse at Orange SA's Dividend History
Orange SA has maintained a consistent dividend payment record since 1998. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Orange SA's Dividend Yield and Growth
As of today, Orange SA currently has a 12-month trailing dividend yield of 6.38% and a 12-month forward dividend yield of 15.40%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Orange SA's annual dividend growth rate was 5.30%. And over the past decade, Orange SA's annual dividends per share growth rate stands at 1.60%.
Based on Orange SA's dividend yield and five-year growth rate, the 5-year yield on cost of Orange SA stock as of today is approximately 6.38%.
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 2024-03-31, Orange SA's dividend payout ratio is 0.68.
Orange SA's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Orange SA's profitability 7 out of 10 as of 2024-03-31, suggesting good profitability prospects. The company has reported positive net income for each of 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. Orange SA's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Revenue is the lifeblood of any company, and Orange SA's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Orange SA's revenue has increased by approximately 1.70% per year on average, a rate that underperforms than approximately 63.84% 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, Orange SA's earnings increased by approximately -16.80% per year on average, a rate that underperforms than approximately 83.22% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 2.40%, which underperforms than approximately 60.19% of global competitors.
Next Steps
In conclusion, while Orange SA demonstrates a strong dividend history and an attractive yield, investors should consider the company's mixed growth metrics and profitability indicators when assessing the long-term sustainability of its dividends. For those looking to delve deeper into dividend-paying stocks, 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.
