In This Article:
Assessing the Sustainability and Prospects of Orkla ASA's Dividend
Orkla ASA (ORKLY) recently announced a dividend of $0.56 per share, payable on 2024-05-13, with the ex-dividend date set for 2024-04-19. 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 Orkla ASA's dividend performance and assess its sustainability.
What Does Orkla ASA Do?
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Orkla ASA is a branded consumer goods company, originally from Norway. Its segments include Orkla Foods Europe, Orkla Food Ingredients, Orkla Confectionery & Snacks, Orkla Health, Orkla India, Orkla Home & Personal Care, The European Pizza, Orkla House Care, Health and Sports Nutrition Group, Pierre Robert Group, and Lilleborg. It generates the majority of its revenue from Norway.
A Glimpse at Orkla ASA's Dividend History
Orkla ASA has maintained a consistent dividend payment record since 2006. Dividends are currently distributed on a yearly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Orkla ASA's Dividend Yield and Growth
As of today, Orkla ASA currently has a 12-month trailing dividend yield of 3.91% and a 12-month forward dividend yield of 7.78%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Orkla ASA's annual dividend growth rate was 4.90%. Extended to a five-year horizon, this rate decreased to 3.50% per year. And over the past decade, Orkla ASA's annual dividends per share growth rate stands at 1.80%.
Based on Orkla ASA's dividend yield and five-year growth rate, the 5-year yield on cost of Orkla ASA stock as of today is approximately 4.64%.
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, Orkla ASA's dividend payout ratio is 0.51.
Orkla ASA's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Orkla ASA's profitability 9 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.