Exploring the Dividend Performance and Sustainability of Bank of Queensland Ltd
Bank of Queensland Ltd(BKQNY, Financial) recently announced a dividend of $0.27 per share, payable on 2023-12-01, with the ex-dividend date set for 2023-10-25. 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 Bank of Queensland Ltd's dividend performance and assess its sustainability.
What Does Bank of Queensland Ltd Do?
Bank of Queensland, or BOQ, is an Australia-based bank offering home loans, personal finance, and commercial loans. BOQ operates both owner-managed and corporate branches, and is the owner of Virgin Money Australia and Me Bank. Its BOQ business includes the BOQ branded commercial lending activity, BOQ Finance and BOQ Specialist businesses. The division provides tailored business banking solutions including commercial lending, equipment finance and leasing, cash flow finance, foreign exchange, interest rate hedging, transaction banking, and deposit solutions for commercial customers.
A Glimpse at Bank of Queensland Ltd's Dividend History
Bank of Queensland Ltd 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 Bank of Queensland Ltd's Dividend Yield and Growth
As of today, Bank of Queensland Ltd currently has a 12-month trailing dividend yield of 8.13% and a 12-month forward dividend yield of 7.43%. This suggests an expectation of decreased dividend payments over the next 12 months.
Over the past three years, Bank of Queensland Ltd's annual dividend growth rate was 13.50%. Extended to a five-year horizon, this rate decreased to -10.90% per year. And over the past decade, Bank of Queensland Ltd's annual dividends per share growth rate stands at -5.70%.
Based on Bank of Queensland Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Bank of Queensland Ltd stock as of today is approximately 4.57%.
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 2023-08-31, Bank of Queensland Ltd's dividend payout ratio is 2.46. And this may suggest that the company's dividend may not be sustainable.
Bank of Queensland Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Bank of Queensland Ltd's profitability 4 out of 10 as of 2023-08-31, suggesting the dividend may not be sustainable. 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. Bank of Queensland Ltd's growth rank of 4 out of 10 suggests that the company has poor growth prospects and thus, the dividend may not be sustainable.
Revenue is the lifeblood of any company, and Bank of Queensland Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Bank of Queensland Ltd's revenue has increased by approximately 1.70% per year on average, a rate that underperforms than approximately 76.16% 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, Bank of Queensland Ltd's earnings increased by approximately -9.10% per year on average, a rate that underperforms than approximately 89.89% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -17.70%, which underperforms than approximately 97.31% of global competitors.
Next Steps
In conclusion, while Bank of Queensland Ltd has a history of consistent dividend payments, its recent dividend growth rate, payout ratio, profitability, and growth metrics suggest potential challenges in sustaining its dividends in the long term. Investors should continue to monitor these factors closely to make informed decisions about their investments.
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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.
