In This Article:
Understanding the Future of INCZY's Dividend Sustainability
Incitec Pivot Ltd (INCZY) recently announced a dividend of $0.07 per share, payable on 2024-02-20, with the ex-dividend date set for 2024-02-06. 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 Incitec Pivot Ltd's dividend performance and assess its sustainability.
What Does Incitec Pivot Ltd Do?
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Incitec Pivot is a leading global explosives company with operations in Australia, Asia, and the Americas. We estimate its share of the global commercial explosives market at about 15%. Explosives contributes around 80% of EBIT. Incitec Pivot is also a major Australian fertilizer producer and distributor and is the only Australian manufacturer of ammonium phosphates and urea. Ammonium phosphates are sold in the domestic market and exported.
A Glimpse at Incitec Pivot Ltd's Dividend History
Incitec Pivot Ltd has maintained a consistent dividend payment record since 2021. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Incitec Pivot Ltd's Dividend Yield and Growth
As of today, Incitec Pivot Ltd currently has a 12-month trailing dividend yield of 5.52% and a 12-month forward dividend yield of 5.52%. This suggests an expectation of the same dividend payments over the next 12 months.
Over the past three years, Incitec Pivot Ltd's annual dividend growth rate was 99.50%. Extended to a five-year horizon, this rate decreased to 21.20% per year. And over the past decade, Incitec Pivot Ltd's annual dividends per share growth rate stands at -3.10%.
Based on Incitec Pivot Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Incitec Pivot Ltd stock as of today is approximately 14.44%.
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 2023-09-30, Incitec Pivot Ltd's dividend payout ratio is 1.97, which may suggest that the company's dividend may not be sustainable.