Antofagasta PLC's Dividend Analysis

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Wed, Apr 17, 2024, 5:02 AM 4 min read

Delving into the Dividend Details of Antofagasta PLC

Antofagasta PLC (ANFGF) recently announced a dividend of $0.24 per share, payable on 2024-05-10, with the ex-dividend date set for 2024-04-18. 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 Antofagasta PLC's dividend performance and assess its sustainability.

What Does Antofagasta PLC Do?

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Antofagasta PLC is a Chilean copper mining company. The company operates four copper mines in Chile, two of which produce significant volumes of by-products. The company also has a portfolio of growth opportunities located mainly in Chile. In addition to mining, the company has a transport division providing rail and road cargo services in northern Chile to mining customers. All of the company's operations are located in the Antofagasta Region of northern Chile except for its flagship operation, Los Pelambres, which is in the Coquimbo Region of central Chile. The operating business segments are Los Pelambres, Centinela, Antucoya, Zaldivar, Exploration and evaluation, Corporate and other items, and Transport division. The Los Pelambres segment drives maximum revenue.

A Glimpse at Antofagasta PLC's Dividend History

Antofagasta PLC has maintained a consistent dividend payment record since 2008. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.

Breaking Down Antofagasta PLC's Dividend Yield and Growth

As of today, Antofagasta PLC currently has a 12-month trailing dividend yield of 2.25% and a 12-month forward dividend yield of 1.30%. This suggests an expectation of decreased dividend payments over the next 12 months.

Over the past three years, Antofagasta PLC's annual dividend growth rate was 70.40%. Extended to a five-year horizon, this rate decreased to 19.60% per year. And over the past decade, Antofagasta PLC's annual dividends per share growth rate stands at an impressive 17.50%.

Based on Antofagasta PLC's dividend yield and five-year growth rate, the 5-year yield on cost of Antofagasta PLC stock as of today is approximately 5.51%.

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, Antofagasta PLC's dividend payout ratio is 0.90. And this may suggest that the company's dividend may not be sustainable.

Antofagasta PLC's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Antofagasta PLC's profitability 8 out of 10 as of 2023-12-31, 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. Antofagasta 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 Antofagasta PLC's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Antofagasta PLC's revenue has increased by approximately 9.40% per year on average, a rate that underperforms than approximately 52.53% 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, Antofagasta PLC's earnings increased by approximately 11.00% per year on average, a rate that underperforms than approximately 47.44% of global competitors.

Lastly, the company's 5-year EBITDA growth rate of 9.60%, which underperforms than approximately 54.62% of global competitors.

Next Steps

In conclusion, Antofagasta PLC's upcoming dividend payment, historical dividend growth, and payout ratio all point to a company that values returning capital to shareholders. However, the sustainability of these dividends will hinge on the company's ability to maintain profitability and growth. With a robust profitability rank but mixed growth metrics, investors should keep a close eye on Antofagasta PLC's future earnings and operational performance. Will Antofagasta PLC continue to provide attractive yields, or will investors need to dig deeper into the company's financial health? For those seeking high-dividend yield opportunities, GuruFocus Premium users can leverage the High Dividend Yield Screener to discover more investment prospects.

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.

This article first appeared on GuruFocus.

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