An In-depth Look into Spirax-Sarco Engineering PLC's Dividend Performance and Sustainability
Spirax-Sarco Engineering PLC(SPXSY, Financial) recently announced a dividend of $0.29 per share, payable on 2023-11-27, with the ex-dividend date set for 2023-10-12. 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 Spirax-Sarco Engineering PLCs dividend performance and assess its sustainability.
What Does Spirax-Sarco Engineering PLC Do?
Spirax-Sarco is a global manufacturer of a wide range of applications for industrial and commercial steam systems, electric thermal solutions and peristaltic pumps used across multiple industries. The group operates across three segments and has over 110,000 direct customers across 130 countries. Approximately 85% of group sales are generated from recurring maintenance and small improvements to existing customer systems. Spirax-Sarco has 1,700 product lines and 2,100 sales and service engineers, who account for 25% of employees.
A Glimpse at Spirax-Sarco Engineering PLC's Dividend History
Spirax-Sarco Engineering PLC has maintained a consistent dividend payment record since 2016. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Spirax-Sarco Engineering PLC's Dividend Yield and Growth
As of today, Spirax-Sarco Engineering PLC currently has a 12-month trailing dividend yield of 1.69% and a 12-month forward dividend yield of 1.77%. This suggests an expectation of increase dividend payments over the next 12 months.
Over the past three years, Spirax-Sarco Engineering PLC's annual dividend growth rate was 10.80%. Extended to a five-year horizon, this rate increased to 11.60% per year. And over the past decade, Spirax-Sarco Engineering PLC's annual dividends per share growth rate stands at an impressive 10.10%.
Based on Spirax-Sarco Engineering PLC's dividend yield and five-year growth rate, the 5-year yield on cost of Spirax-Sarco Engineering PLC stock as of today is approximately 2.93%.
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, Spirax-Sarco Engineering PLC's dividend payout ratio is 0.53.
Spirax-Sarco Engineering PLC's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Spirax-Sarco Engineering PLC's profitability 10 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported positive net income for each of 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. Spirax-Sarco Engineering PLC's growth rank of 10 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Spirax-Sarco Engineering PLC's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Spirax-Sarco Engineering PLC's revenue has increased by approximately 9.10% per year on average, a rate that outperforms than approximately 58.28% 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, Spirax-Sarco Engineering PLC's earnings increased by approximately 10.50% per year on average, a rate that outperforms than approximately 47.94% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 5.80%, which outperforms than approximately 42.52% of global competitors.
Next Steps
Considering Spirax-Sarco Engineering PLC's consistent dividend payments, impressive growth rate, sustainable payout ratio, high profitability, and robust growth metrics, it appears that the company is well-positioned to maintain its dividend payments in the foreseeable future. However, investors should continue to monitor these key metrics to ensure the company's financial health and its ability to sustain dividend payments over the long term.
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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.
