Exploring the Sustainability and Growth of Linde PLC's Dividends
Linde PLC (LIN, Financial) recently announced a dividend of $1.39 per share, payable on 2024-06-18, with the ex-dividend date set for 2024-06-04. 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 Linde PLC's dividend performance and assess its sustainability.
What Does Linde PLC Do?
Linde is the largest industrial gas supplier in the world, with operations in over 100 countries. The firm's main products are atmospheric gases (including oxygen, nitrogen, and argon) and process gases (including hydrogen, carbon dioxide, and helium), as well as equipment used in industrial gas production. Linde serves a wide variety of end markets, including chemicals, manufacturing, healthcare, and steelmaking. Linde generated approximately $33 billion in revenue in 2023.
A Glimpse at Linde PLC's Dividend History
Linde PLC has maintained a consistent dividend payment record since 1992. Dividends are currently distributed on a quarterly basis. Linde PLC has increased its dividend each year since 1996. The stock is thus listed as a dividend aristocrat, an honor that is given to companies that have increased their dividend each year for at least the past 28 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Linde PLC's Dividend Yield and Growth
As of today, Linde PLC currently has a 12-month trailing dividend yield of 1.20% and a 12-month forward dividend yield of 1.28%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Linde PLC's annual dividend growth rate was 9.80%. Extended to a five-year horizon, this rate decreased to 9.40% per year. And over the past decade, Linde PLC's annual dividends per share growth rate stands at 7.50%. Based on Linde PLC's dividend yield and five-year growth rate, the 5-year yield on cost of Linde PLC stock as of today is approximately 1.88%.
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, Linde PLC's dividend payout ratio is 0.36. Linde PLC's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Linde PLC's profitability 9 out of 10 as of 2024-03-31, 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. Linde PLC's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Revenue is the lifeblood of any company, and Linde PLC's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Linde PLC's revenue has increased by approximately 9.20% per year on average, a rate that outperforms approximately 53.61% 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, Linde PLC's earnings increased by approximately 19.90% per year on average, a rate that outperforms approximately 70.71% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 18.10%, which outperforms approximately 71.79% of global competitors.
Conclusion
With a robust track record of dividend payments, consistent growth in dividend rates, and a solid payout ratio, Linde PLC stands out as a potentially strong candidate for investors seeking dividend growth and sustainability. The company's impressive profitability and growth metrics further reinforce its capability to maintain and potentially increase its dividend distributions in the future. For those looking to explore more high-dividend yield opportunities, GuruFocus Premium users can utilize 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.
