Understanding YIT Oyj's Dividend History, Yield, and Sustainability
YIT Oyj(YITYY, Financial) recently announced a dividend of $0.05 per share, payable on 2023-10-26, with the ex-dividend date set for 2023-10-02. 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 deep dive into YIT Oyjs dividend performance and assess its sustainability.
What Does YIT Oyj Do?
YIT Oyj is a Finnish construction service provider. YIT develops and builds apartments and living services, business premises and entire areas. The company has four reportable segments: 1) Housing segment which comprises the development and construction of apartments, entire residential areas and leisure-time residences; 2) Business Premises segment engages in contracting in business premises construction as well as residential construction. 3) Infrastructure segment includes railway and traffic route construction and maintenance, green construction, bridge building and repairing, foundation construction and other earthworks, shoreline and waterworks construction, etc; 4) Property Development segment develops business premises and hybrid projects as well as wind farms.
A Glimpse at YIT Oyj's Dividend History
YIT Oyj has maintained a consistent dividend payment record since 2013. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down YIT Oyj's Dividend Yield and Growth
As of today, YIT Oyj currently has a 12-month trailing dividend yield of 8.03% and a 12-month forward dividend yield of 8.84%. This suggests an expectation of increase dividend payments over the next 12 months.
Over the past three years, YIT Oyj's annual dividend growth rate was -16.00%. Extended to a five-year horizon, this rate increased to -9.00% per year. And over the past decade, YIT Oyj's annual dividends per share growth rate stands at -12.00%.
Based on YIT Oyj's dividend yield and five-year growth rate, the 5-year yield on cost of YIT Oyj stock as of today is approximately 5.01%.
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 2023-06-30, YIT Oyj's dividend payout ratio is 2.12. This may suggest that the company's dividend may not be sustainable.
YIT Oyj's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks YIT Oyj's profitability 5 out of 10 as of 2023-06-30, suggesting fair profitability. The company has reported net profit in 8 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. YIT Oyj's growth rank of 5 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and YIT Oyj's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. YIT Oyj's revenue has increased by approximately -10.70% per year on average, a rate that underperforms than approximately 80.01% 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, YIT Oyj's earnings increased by approximately 141.00% per year on average, a rate that underperforms than approximately 2.84% of global competitors.
Next Steps
Based on YIT Oyj's dividend payments, dividend growth rate, payout ratio, profitability, and growth metrics, it is clear that the company has a mixed track record. While it has demonstrated a consistent dividend payment record, its negative dividend growth rate and high payout ratio raise questions about the sustainability of its dividends. Moreover, while the company has shown fair profitability and growth, it lags behind many of its global competitors. Therefore, investors should exercise caution and thoroughly examine the company's financial health before making an investment decision.
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
