Assessing the Sustainability and Prospects of ABM Industries Inc's Dividend
ABM Industries Inc(ABM, Financial) recently announced a dividend of $0.22 per share, payable on 2023-11-06, with the ex-dividend date set for 2023-10-04. As investors anticipate this upcoming payment, it's crucial to evaluate the company's dividend history, yield, and growth rates. Using data from GuruFocus, we delve into ABM Industries Inc's dividend performance and assess its sustainability.
ABM Industries Inc: An Overview
ABM Industries is a provider of integrated facility solutions. It offers its solutions through five segments: business and industry, aviation, technology and manufacturing, education, and technical solutions. Predominantly operating in the United States, the company derives most of its revenue from the business and industry segment, which includes janitorial, facilities engineering, and parking services for commercial real estate properties and sports and entertainment venues, among other services.
ABM Industries Inc's Dividend History
ABM Industries Inc has upheld a consistent dividend payment record since 1968. Dividends are distributed on a quarterly basis. The company has increased its dividend annually since 1968, earning it the distinction of a dividend king, a title bestowed on companies that have increased their dividend each year for at least the past 55 years.
ABM Industries Inc's Dividend Yield and Growth
As of today, ABM Industries Inc currently has a 12-month trailing dividend yield of 2.19% and a 12-month forward dividend yield of 2.26%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, ABM Industries Inc's annual dividend growth rate was 2.70%. When extended to a five-year horizon, this rate increased to 2.80% per year. Over the past decade, ABM Industries Inc's annual dividends per share growth rate stands at 3.00%.
Based on ABM Industries Inc's dividend yield and five-year growth rate, the 5-year yield on cost of ABM Industries Inc stock as of today is approximately 2.51%.
Assessing Dividend Sustainability: Payout Ratio and Profitability
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, ensuring the availability of funds for future growth and unexpected downturns. As of 2023-07-31, ABM Industries Inc's dividend payout ratio is 0.24.
ABM Industries Inc's profitability rank is 7 out of 10 as of 2023-07-31, 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
ABM Industries Inc's growth rank of 7 out of 10 suggests a good growth trajectory relative to its competitors. The company's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. ABM Industries Inc's revenue has increased by approximately 6.00% per year on average, a rate that outperforms approximately 54.83% 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, ABM Industries Inc's earnings increased by approximately 21.30% per year on average, a rate that outperforms approximately 63.79% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -2.90%, outperforms approximately 23.74% of global competitors.
Conclusion
Considering ABM Industries Inc's consistent dividend payments, impressive growth rate, low payout ratio, and high profitability and growth metrics, it appears to be a promising investment for dividend-focused investors. However, as with all investments, it's essential to conduct thorough research and consider the company's overall financial health before making any investment decisions.
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
