An In-depth Look at the Company's Dividend Performance and Sustainability
Williams-Sonoma Inc (WSM, Financial) recently announced a dividend of $0.9 per share, payable on 2023-11-24, with the ex-dividend date set for 2023-10-19. 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 delve into Williams-Sonoma Inc's dividend performance and assess its sustainability.
What Does Williams-Sonoma Inc Do?
With a wide retail and direct-to-consumer presence, Williams-Sonoma is a leader in the $300 billion domestic home category, focused on expanding its exposure in the B2B, marketplace, and franchise areas. Namesake Williams-Sonoma (175 stores) offers high-end cooking essentials, while Pottery Barn (189) provides casual home accessories. Brand extensions include Pottery Barn Kids (52) and PBteen. West Elm (121) is an emerging concept for young professionals, and Rejuvenation (nine) offers lighting and house parts. Williams-Sonoma also has a business-to-business team that supports projects that range from residential to large-scale commercial.
A Glimpse at Williams-Sonoma Inc's Dividend History
Williams-Sonoma Inc has maintained a consistent dividend payment record since 2006. Dividends are currently distributed on a quarterly basis. Williams-Sonoma Inc has increased its dividend each year since 2007, earning the company the status of a dividend achiever, an honor bestowed on companies that have increased their dividend each year for at least the past 16 years.
Breaking Down Williams-Sonoma Inc's Dividend Yield and Growth
As of today, Williams-Sonoma Inc currently has a 12-month trailing dividend yield of 2.06% and a 12-month forward dividend yield of 2.22%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Williams-Sonoma Inc's annual dividend growth rate was 17.60%. Extended to a five-year horizon, this rate decreased to 14.60% per year. And over the past decade, Williams-Sonoma Inc's annual dividends per share growth rate stands at an impressive 10.90%.
Based on Williams-Sonoma Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Williams-Sonoma Inc stock as of today is approximately 4.07%.
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 2023-07-31, Williams-Sonoma Inc's dividend payout ratio is 0.23.
Williams-Sonoma Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Williams-Sonoma Inc's profitability 9 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
To ensure the sustainability of dividends, a company must have robust growth metrics. Williams-Sonoma Inc's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Williams-Sonoma Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Williams-Sonoma Inc's revenue has increased by approximately 19.00% per year on average, a rate that outperforms approximately 81.51% 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, Williams-Sonoma Inc's earnings increased by approximately 53.80% per year on average, a rate that outperforms approximately 86.33% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 44.80%, which outperforms approximately 91.74% of global competitors.
Next Steps
In conclusion, Williams-Sonoma Inc's consistent dividend payments, impressive growth rate, and low payout ratio, coupled with its strong profitability and growth metrics, suggest a promising outlook for the company's dividend sustainability. Investors can look forward to potentially increased dividend payments in the future. However, as with all investments, it's crucial to conduct thorough research and consider all factors before making a decision.
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.
