Localiza Rent A Car SA's Dividend Analysis
In This Article:
Unlocking the Value of Dividends at Localiza Rent A Car SA
Localiza Rent A Car SA (LZRFY) recently announced a dividend of $0.08 per share, payable on 2024-06-03, with the ex-dividend date set for 2024-04-05. 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 Localiza Rent A Car SA's dividend performance and assess its sustainability.
What Does Localiza Rent A Car SA Do?
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Localiza Rent A Car SA is a car rental service provider with the majority of its operations in Brazil. Through its subsidiaries, the company rents cars to individuals, manages corporate car fleets, sells its fleet to the general public, and offers a franchise model. Franchisees account for roughly half of Localiza's car rental locations, while the majority of cars accessible with Localiza are owned by the company. The fleet rental division has long-term agreements with companies that come up for renewal roughly every two to three years. The car rental segment delivers three-quarters of annual revenue, and fleet rental makes up the rest, with an insignificant share contributed by the franchise management division.
A Glimpse at Localiza Rent A Car SA's Dividend History
Localiza Rent A Car SA has maintained a consistent dividend payment record since 2012. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Localiza Rent A Car SA's Dividend Yield and Growth
As of today, Localiza Rent A Car SA currently has a 12-month trailing dividend yield of 2.88% and a 12-month forward dividend yield of 2.92%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Localiza Rent A Car SA's annual dividend growth rate was 63.30%. Extended to a five-year horizon, this rate decreased to 43.60% per year. And over the past decade, Localiza Rent A Car SA's annual dividends per share growth rate stands at an impressive 27.90%.
Based on Localiza Rent A Car SA's dividend yield and five-year growth rate, the 5-year yield on cost of Localiza Rent A Car SA stock as of today is approximately 17.59%.
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, Localiza Rent A Car SA's dividend payout ratio is 0.87, which may suggest that the company's dividend may not be sustainable.