In This Article:
Assessing the Sustainability of Woolworths Group Ltd's Upcoming Dividend
Woolworths Group Ltd (WOLWF) recently announced a dividend of $0.47 per share, payable on 2024-04-11, with the ex-dividend date set for 2024-02-28. 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 Woolworths Group Ltd's dividend performance and assess its sustainability.
What Does Woolworths Group Ltd Do?
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Woolworths Group Ltd is Australia's largest retailer, with operations that include supermarkets in Australia and New Zealand, as well as the Big W discount department stores. The Australian food division is the primary contributor to the group's EBIT, followed by New Zealand supermarkets, while Big W offers a smaller contribution to the overall earnings.
A Glimpse at Woolworths Group Ltd's Dividend History
Woolworths Group Ltd has maintained a consistent dividend payment record since 2020, with dividends currently distributed on a bi-annual basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Woolworths Group Ltd's Dividend Yield and Growth
As of today, Woolworths Group Ltd currently has a 12-month trailing dividend yield of 3.16% and a 12-month forward dividend yield of 2.85%, suggesting an expectation of decreased dividend payments over the next 12 months.
Over the past three years, Woolworths Group Ltd's annual dividend growth rate was -1.30%. Extended to a five-year horizon, this rate increased to 0.80% per year. And over the past decade, Woolworths Group Ltd's annual dividends per share growth rate stands at -3.30%.
Based on Woolworths Group Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Woolworths Group Ltd stock as of today is approximately 3.29%.
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, Woolworths Group Ltd's dividend payout ratio is 77.44, which may suggest that the company's dividend may not be sustainable.