Schlumberger Ltd's Dividend Analysis
Exploring the Sustainability and Growth of Schlumberger Ltd's Dividends
Schlumberger Ltd (NYSE:SLB) recently announced a dividend of $0.28 per share, payable on 2024-07-11, with the ex-dividend date set for 2024-06-05. 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 Schlumberger Ltd's dividend performance and assess its sustainability.
What Does Schlumberger Ltd Do?
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Schlumberger Ltd (NYSE:SLB) is the largest oilfield service firm in the world, with expertise in myriad disciplines, including reservoir performance, well construction, production enhancement, and more recently, digital solutions. It maintains a reputation as one of the industry's leading innovators, which has earned it a dominant share in numerous end markets.
A Glimpse at Schlumberger Ltd's Dividend History
Schlumberger Ltd has maintained a consistent dividend payment record since 1985. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Schlumberger Ltd's Dividend Yield and Growth
As of today, Schlumberger Ltd currently has a 12-month trailing dividend yield of 2.32% and a 12-month forward dividend yield of 2.47%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Schlumberger Ltd's annual dividend growth rate was 4.60%. Extended to a five-year horizon, this rate decreased to -19.10% per year. And over the past decade, Schlumberger Ltd's annual dividends per share growth rate stands at -9.10%.
Based on Schlumberger Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Schlumberger Ltd stock as of today is approximately 0.80%.
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 2024-03-31, Schlumberger Ltd's dividend payout ratio is 0.33.
Schlumberger Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Schlumberger Ltd's profitability 7 out of 10 as of 2024-03-31, suggesting good profitability prospects. The company has reported net profit in 6 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. Schlumberger Ltd's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Schlumberger Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Schlumberger Ltd's revenue has increased by approximately 10.60% per year on average, a rate that underperforms approximately 62.66% 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, Schlumberger Ltd's earnings increased by approximately 54.80% per year on average, a rate that underperforms approximately 18.28% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 13.00%, which underperforms approximately 45.61% of global competitors.
Conclusion
Assessing Schlumberger Ltd's dividend payments, growth rates, payout ratio, and overall financial health, the company presents a mixed picture. While there are challenges, particularly in historical dividend growth rates, its strong profitability and solid growth prospects may continue to support its dividend payments. For investors considering long-term income, Schlumberger Ltd warrants a close examination of its financial resilience and market position.
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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.