Exploring the Dividend Trends and Financial Health of China's Largest Brewer
China Resources Beer (Holdings) Co Ltd (CRHKY) recently announced a dividend of $0.08 per share, payable on 2024-07-15, with the ex-dividend date set for 2024-05-22. 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 China Resources Beer (Holdings) Co Ltd's dividend performance and assess its sustainability.
What Does China Resources Beer (Holdings) Co Ltd Do?
This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
How to calculate the intrinsic value of a stock?
China Resources Beer, or CR Beer, was originally a conglomerate enterprise with operations across retail, beer, food and beverage sectors. In September 2015, the company disposed of all its non-beer businesses and became a pure beer producer. Through a series of mergers and acquisitions, the company retains its leadership position in China's beer industry. Amid the premiumization trend in the domestic beer market, CR beer acquired Heineken China in 2019, which allows CR Beer access to a premium international brand and also leverages its sophisticated distribution network to grow Heineken's sales and market share. CR Beer is now China's largest brewer, with a volume share of about 24%, versus 18% of Tsingtao and 16% of Budweiser APAC, based on Euromonitor data.
China Resources Beer (Holdings) Co Ltd's Dividend Analysis
A Glimpse at China Resources Beer (Holdings) Co Ltd's Dividend History
China Resources Beer (Holdings) Co Ltd has maintained a consistent dividend payment record since 2017. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
China Resources Beer (Holdings) Co Ltd's Dividend Analysis
Breaking Down China Resources Beer (Holdings) Co Ltd's Dividend Yield and Growth
As of today, China Resources Beer (Holdings) Co Ltd currently has a 12-month trailing dividend yield of 1.71% and a 12-month forward dividend yield of 1.82%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, China Resources Beer (Holdings) Co Ltd's annual dividend growth rate was 47.50%. Extended to a five-year horizon, this rate decreased to 37.10% per year. Based on China Resources Beer (Holdings) Co Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of China Resources Beer (Holdings) Co Ltd stock as of today is approximately 8.28%.
China Resources Beer (Holdings) Co 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, China Resources Beer (Holdings) Co Ltd's dividend payout ratio is 0.40.
China Resources Beer (Holdings) Co Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks China Resources Beer (Holdings) Co Ltd's profitability 6 out of 10 as of 2023-12-31, suggesting fair profitability. The company has reported net profit in 8 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. China Resources Beer (Holdings) Co Ltd'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 China Resources Beer (Holdings) Co Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. China Resources Beer (Holdings) Co Ltd's revenue has increased by approximately 4.50% per year on average, a rate that underperforms than approximately 67.65% 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, China Resources Beer (Holdings) Co Ltd's earnings increased by approximately 28.80% per year on average, a rate that underperforms than approximately 31.79% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 42.10%, which underperforms than approximately 10.24% of global competitors.
Concluding Thoughts
With a solid track record of dividend payments, a promising dividend growth rate, and a sustainable payout ratio, China Resources Beer (Holdings) Co Ltd appears to be a viable option for dividend-seeking investors. The company's profitability and growth metrics, although not leading the industry, still provide a stable foundation for future dividend sustainability. Investors interested in high-dividend yield opportunities can further explore using the High Dividend Yield Screener available to GuruFocus Premium users.
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.
