Phoenix Group Holdings PLC's Dividend Analysis

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GuruFocus Research

Wed, Apr 10, 2024, 5:07 AM 4 min read

Exploring the Upcoming Dividend and Assessing Its Sustainability

Phoenix Group Holdings PLC (PNXGF) recently announced a dividend of $0.27 per share, payable on 2024-05-22, with the ex-dividend date set for 2024-04-11. 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 Phoenix Group Holdings PLC's dividend performance and assess its sustainability.

What Does Phoenix Group Holdings PLC Do?

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Phoenix Group Holdings PLC is a British closed life assurance fund consolidator. Its main specialization is the management and acquisition of closed life and pension funds. The company operates mainly in the United Kingdom. The brands of the group include Standard Life, SunLife, Phoenix Life, ReAssure, and Phoenix CIS.

Phoenix Group Holdings PLC's Dividend Analysis

A Glimpse at Phoenix Group Holdings PLC's Dividend History

Phoenix Group Holdings PLC 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 Phoenix Group Holdings PLC's Dividend Yield and Growth

As of today, Phoenix Group Holdings PLC currently has a 12-month trailing dividend yield of 9.22% and a 12-month forward dividend yield of 9.76%. This suggests an expectation of increased dividend payments over the next 12 months.

Over the past three years, Phoenix Group Holdings PLC's annual dividend growth rate was 3.60%. Extended to a five-year horizon, this rate decreased to 2.60% per year. And over the past decade, Phoenix Group Holdings PLC's annual dividends per share growth rate stands at 2.60%.

Based on Phoenix Group Holdings PLC's dividend yield and five-year growth rate, the 5-year yield on cost of Phoenix Group Holdings PLC stock as of today is approximately 10.48%.

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, Phoenix Group Holdings PLC's dividend payout ratio is 0.00.

Phoenix Group Holdings PLC's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Phoenix Group Holdings PLC's profitability 3 out of 10 as of 2023-12-31, suggesting the dividend may not be sustainable. The company has reported net profit in 5 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. Phoenix Group Holdings PLC's growth rank of 3 out of 10 suggests that the company has poor growth prospects and thus, the dividend may not be sustainable.

Revenue is the lifeblood of any company, and Phoenix Group Holdings PLC's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Phoenix Group Holdings PLC's revenue has increased by approximately -12.90% per year on average, a rate that underperforms approximately 87.34% 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, Phoenix Group Holdings PLC's earnings increased by approximately -30.80% per year on average, a rate that underperforms approximately 91.91% of global competitors.

Lastly, the company's 5-year EBITDA growth rate of -23.40%, which underperforms approximately 95.32% of global competitors.

Next Steps

Considering Phoenix Group Holdings PLC's dividend payments, growth rate, payout ratio, profitability, and growth metrics, investors should exercise caution. The high yield is attractive, but the underlying financial health and growth prospects of the company raise concerns about the long-term sustainability of its dividends. Value investors may want to delve deeper into the company's financials, management strategies, and market position before making an investment decision. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener to find more sustainable dividend-paying opportunities.

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.

This article first appeared on GuruFocus.

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