Exploring the Sustainability and Growth of Dividends
Jeronimo Martins SGPS SA (JRONY, Financial) recently announced a dividend of $1.41 per share, payable on 2024-05-30, with the ex-dividend date set for 2024-05-13. 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 Jeronimo Martins SGPS SA's dividend performance and assess its sustainability.
What Does Jeronimo Martins SGPS SA Do?
Jeronimo Martins SGPS SA operates in food distribution, agribusiness, and other businesses. The food distribution business is the group's main activity, which consists of retail and wholesale operations under the brands Pingo Doce and Recheio in Portugal, Poland, and Colombia. The group has five segments. Portugal Retail: comprises the business unit of JMR (Pingo Doce supermarkets), Portugal Cash & Carry: includes the wholesale business unit Recheio, Poland Retail: the business unit which operates under the Biedronka banner, Colombia Retail: the business unit which operates under Ara banner, & Others, eliminations and adjustments. The majority of revenue is derived from the Poland retail segment.
A Glimpse at Jeronimo Martins SGPS SA's Dividend History
Jeronimo Martins SGPS SA has maintained a consistent dividend payment record since 2012. Dividends are currently distributed on a yearly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Jeronimo Martins SGPS SA's Dividend Yield and Growth
As of today, Jeronimo Martins SGPS SA currently has a 12-month trailing dividend yield of 2.70% and a 12-month forward dividend yield of 3.20%, suggesting an expectation of increased dividend payments over the next 12 months. Over the past three years, Jeronimo Martins SGPS SA's annual dividend growth rate was 16.80%. Extended to a five-year horizon, this rate decreased to 5.70% per year. And over the past decade, Jeronimo Martins SGPS SA's annual dividends per share growth rate stands at 6.90%.
Based on Jeronimo Martins SGPS SA's dividend yield and five-year growth rate, the 5-year yield on cost of Jeronimo Martins SGPS SA stock as of today is approximately 3.56%.
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. As of 2024-03-31, Jeronimo Martins SGPS SA's dividend payout ratio is 0.49. Jeronimo Martins SGPS SA's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Jeronimo Martins SGPS SA's profitability 8 out of 10 as of 2024-03-31, 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. Jeronimo Martins SGPS SA's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Jeronimo Martins SGPS SA's revenue has increased by approximately 16.60% per year on average, a rate that outperforms approximately 82.03% 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, Jeronimo Martins SGPS SA's earnings increased by approximately 33.00% per year on average, a rate that outperforms approximately 79.5% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 14.90%, which outperforms approximately 59.17% of global competitors.
Conclusion
Jeronimo Martins SGPS SA's robust dividend history, coupled with a promising payout ratio and strong growth metrics, positions it as a potentially sustainable dividend payer. The company's strategic operations in diverse markets and consistent profitability provide a solid foundation for future dividend payments. Investors seeking to enhance their portfolio with a stock that offers potential for both income and growth may find Jeronimo Martins SGPS SA an attractive option. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
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.
