Assessing the Upcoming Dividend and Historical Performance
Thomson Reuters Corp (NYSE:TRI) recently announced a dividend of $0.54 per share, payable on 2024-03-08, with the ex-dividend date set for 2024-02-20. 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 Thomson Reuters Corp's dividend performance and assess its sustainability.
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Thomson Reuters is the result of the $17.6 billion megamerger of Canada's Thomson and the United Kingdom's Reuters Group in 2008. In 2021, Thomson Reuters completed the sale of Refinitiv to LSE Group. Thomson Reuters' three largest segments are its legal professionals, Tax and accounting, and corporates segments. Legal professionals is about 42% of the firm's revenue and 47% of the firm's adjusted EBITDA. Tax and accounting makes up about 20%-25% of the firm's revenue and EBITDA. Corporates, which consists of legal professionals and tax and accounting products sold to corporations, also makes up about 20%-25% of the firm's revenue and EBITDA. Thomson Reuters' smaller segments include its Reuters news business and global print business.
Thomson Reuters Corp's Dividend Analysis
A Glimpse at Thomson Reuters Corp's Dividend History
Thomson Reuters Corp has maintained a consistent dividend payment record since 1989. Dividends are currently distributed on a quarterly basis.
Below is a chart showing annual Dividends Per Share for tracking historical trends.
Thomson Reuters Corp's Dividend Analysis
Breaking Down Thomson Reuters Corp's Dividend Yield and Growth
As of today, Thomson Reuters Corp currently has a 12-month trailing dividend yield of 1.25% and a 12-month forward dividend yield of 1.35%. This suggests an expectation of increased dividend payments over the next 12 months.
Thomson Reuters Corp's dividend yield of 1.25% is near a 10-year low and underperforms than 84.02% of global competitors in the Business Services industry, suggesting that the company's dividend yield may not be a compelling proposition for income investors.
Over the past three years, Thomson Reuters Corp's annual dividend growth rate was 9.90%. Extended to a five-year horizon, this rate decreased to 5.70% per year. And over the past decade, Thomson Reuters Corp's annual dividends per share growth rate stands at 3.80%.
Based on Thomson Reuters Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Thomson Reuters Corp stock as of today is approximately 1.65%.
Thomson Reuters Corp's Dividend Analysis
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, Thomson Reuters Corp's dividend payout ratio is 0.57.
Thomson Reuters Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Thomson Reuters Corp's profitability 8 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Thomson Reuters Corp's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Thomson Reuters Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Thomson Reuters Corp's revenue has increased by approximately 7.20% per year on average, a rate that outperforms approximately 56.42% 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, Thomson Reuters Corp's earnings increased by approximately 24.20% per year on average, a rate that outperforms approximately 69.83% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 32.10%, which outperforms approximately 86.82% of global competitors, bodes well for future dividend sustainability.
Concluding Thoughts on Thomson Reuters Corp's Dividend Outlook
In conclusion, Thomson Reuters Corp's upcoming dividend, along with its historical dividend consistency, provides a measure of reassurance to investors. Despite a yield that is currently lower than many industry peers, the company's solid dividend growth rate, reasonable payout ratio, and strong profitability metrics suggest a sustainable dividend policy. Furthermore, the robust growth indicators signal a healthy financial trajectory, which is likely to support ongoing dividend payments. Investors considering Thomson Reuters Corp for its dividend prospects should weigh these factors and monitor the company's performance closely. For those seeking additional high-dividend yield opportunities, the High Dividend Yield Screener available to GuruFocus Premium users can be an invaluable tool.
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.
