Insights into the Dividend Performance and Sustainability of Novozymes A/S (NVZMY, Financial)
Novozymes A/S(NVZMY) recently announced a dividend of $0.6 per share, payable on 2023-11-01, with the ex-dividend date set for 2023-10-20. 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 Novozymes A/S's dividend performance and assess its sustainability.
What Does Novozymes A/S Do?
Novozymes is the world leader in industrial enzymes. In recent years, the company has expanded into micro-organisms, primarily for agricultural markets. The firm supplies five major industry groups: household care, food and beverages, bioenergy, agriculture and feed, and technical and pharma. Its biological solutions create value for its customers by improving yield efficiency and performance, while saving energy and generating less waste. The company is headquartered in Denmark.
A Glimpse at Novozymes A/S's Dividend History
Novozymes A/S has maintained a consistent dividend payment record since 2004. Dividends are currently distributed on a yearly basis. Novozymes A/S has increased its dividend each year since 2004. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 19 years.
Breaking Down Novozymes A/S's Dividend Yield and Growth
As of today, Novozymes A/S currently has a 12-month trailing dividend yield of 2.05% and a 12-month forward dividend yield of 2.89%. This suggests an expectation of increase dividend payments over the next 12 months.
Novozymes A/S's dividend yield of 2.05% is near a 10-year high and outperforms than 51.04 of global competitors in the Chemicals industry, suggesting that the company's dividend yield stands out as an attractive proposition for income investors.
Over the past three years, Novozymes A/S's annual dividend growth rate was 3.20%. Extended to a five-year horizon, this rate increased to 6.20% per year. And over the past decade, Novozymes A/S's annual dividends per share growth rate stands at an impressive 11.80%.
Based on Novozymes A/S's dividend yield and five-year growth rate, the 5-year yield on cost of Novozymes A/S stock as of today is approximately 2.77%.
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, Novozymes A/S's dividend payout ratio is 0.48.
Novozymes A/S's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Novozymes A/S's profitability 9 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. Novozymes A/S'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 Novozymes A/S's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Novozymes A/S's revenue has increased by approximately 7.90% per year on average, a rate that underperforms than approximately 55.72% 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, Novozymes A/S's earnings increased by approximately 6.20% per year on average, a rate that underperforms than approximately 59.73% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 3.20%, which underperforms than approximately 67.44% of global competitors.
Next Steps
In conclusion, Novozymes A/S presents a compelling case for income investors, with its consistent dividend payments, impressive growth rates, and sustainable payout ratio. The company's strong profitability and growth metrics further enhance its attractiveness. However, investors should also consider the company's relative underperformance in revenue and earnings growth compared to global competitors. It's important for investors to further investigate these aspects and make informed decisions based on their individual risk tolerance and investment goals.
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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.
