Assessing the Sustainability and Growth of Aurizon Holdings Ltd's Dividends
Aurizon Holdings Ltd (QRNNF) recently announced a dividend of $0.1 per share, payable on 2024-03-27, with the ex-dividend date set for 2024-02-26. 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 Aurizon Holdings Ltd's dividend performance and assess its sustainability.
This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
How to calculate the intrinsic value of a stock?
Aurizon Holdings Ltd operates rail haulage of coal, iron ore, and freight, and owns a regulated rail network in Queensland. Coal haulage from mine to port contributes close to 40% of earnings. The non-coal bulk segment contributes about 10% of earnings and undertakes the rail haulage of agricultural, mining, and industrial products. The rail network, composed of 2,670 kilometers of coal rail network under a 99-year lease from the Queensland government, contributes around half of earnings.
Aurizon Holdings Ltd's Dividend Analysis
A Glimpse at Aurizon Holdings Ltd's Dividend History
Aurizon Holdings Ltd has maintained a consistent dividend payment record since 2011. Dividends are currently distributed on a bi-annual basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Aurizon Holdings Ltd's Dividend Yield and Growth
As of today, Aurizon Holdings Ltd currently has a 12-month trailing dividend yield of 3.70% and a 12-month forward dividend yield of 4.78%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Aurizon Holdings Ltd's annual dividend growth rate was -11.80%. Extended to a five-year horizon, this rate increased to -3.10% per year. And over the past decade, Aurizon Holdings Ltd's annual dividends per share growth rate stands at 6.10%.
Based on Aurizon Holdings Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Aurizon Holdings Ltd stock as of today is approximately 3.16%.
Aurizon Holdings Ltd's Dividend Analysis
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, Aurizon Holdings Ltd's dividend payout ratio is 0.65.
Aurizon Holdings Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Aurizon Holdings Ltd's profitability 7 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported net profit in 9 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Aurizon Holdings Ltd'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 Aurizon Holdings Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Aurizon Holdings Ltd's revenue has increased by approximately 6.60% per year on average, a rate that outperforms approximately 51.43% 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, Aurizon Holdings Ltd's earnings decreased by approximately -16.50% per year on average, a rate that outperforms approximately 17.15% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -5.90%, which outperforms approximately 20.89% of global competitors, also contributes to the overall assessment of its growth prospects.
Engaging Conclusion: The Dividend Perspective
In conclusion, Aurizon Holdings Ltd's upcoming dividend payment reflects its commitment to providing shareholder value. Despite fluctuations in dividend growth rates, its consistent dividend history, reasonable payout ratio, and solid profitability rank paint a picture of a company that values its dividend policy. Coupled with a positive growth rank and a fair performance in revenue and earnings growth metrics, Aurizon Holdings Ltd appears to be navigating the complexities of the market while maintaining its appeal to dividend investors. As value investors consider the future prospects of Aurizon Holdings Ltd, they might also ponder: will the company's strategic initiatives and industry position allow it to continue its dividend payments at the current rate or better? For those seeking to expand their portfolio with 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.
