Assessing the Sustainability of SLM Corp's Upcoming Dividend
SLM Corp (SLM, Financial) recently announced a dividend of $0.11 per share, payable on 2023-12-15, with the ex-dividend date set for 2023-12-01. 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 SLM Corp's dividend performance and assess its sustainability.
What Does SLM Corp Do?
SLM Corp is the largest student lender in the United States. It specializes in education financing, servicing student loans through the Federal Family Education Loan Program as well as private lending. Additionally, SLM Corp offers debt management services and operates college savings plans, positioning itself as a comprehensive financial resource for students and educational institutions.
A Glimpse at SLM Corp's Dividend History
SLM Corp has upheld a steady record of dividend payments since 2019, rewarding shareholders with quarterly distributions. This consistency underlines the company's commitment to returning value to its investors.
Below is a chart showing the annual Dividends Per Share which provides a historical perspective on SLM Corp's dividend trends.
Breaking Down SLM Corp's Dividend Yield and Growth
As of today, SLM Corp's 12-month trailing dividend yield stands at 2.84%, matched by an equivalent 12-month forward dividend yield. This parity suggests that the market anticipates the company to maintain its dividend payout in the foreseeable future.
Highlighting the company's growth, SLM Corp's annual dividend growth rate over the past three years was an impressive 54.20%. Furthermore, based on the yield and growth rate, the 5-year yield on cost for SLM Corp stock is approximately 2.84%.
The Sustainability Question: Payout Ratio and Profitability
The dividend payout ratio, which is currently at 0.31 as of 2023-09-30, is a crucial indicator of SLM Corp's ability to sustain its dividend payments. This low ratio implies that the company retains a substantial portion of its earnings, which can be utilized for growth opportunities and to cushion against economic downturns.
Another aspect to consider is SLM Corp's profitability rank, which stands at 5 out of 10 as of 2023-09-30. This ranking indicates moderate profitability, and with a history of positive net income over the past decade, the company demonstrates a solid financial foundation.
Growth Metrics: The Future Outlook
SLM Corp's growth rank of 5 out of 10 reflects a balanced growth potential for the company. Revenue growth is a vital sign of a company's health, and SLM Corp's revenue per share and 3-year revenue growth rate signal a robust revenue stream, outperforming 78.32% of global peers.
The 3-year EPS growth rate further attests to SLM Corp's earnings expansion, surpassing 56.47% of global competitors. Additionally, the 5-year EBITDA growth rate of 30.80% places SLM Corp ahead of 83.92% of its global competitors, highlighting its strong financial performance.
Next Steps
In conclusion, SLM Corp's upcoming dividend, backed by a consistent dividend history and a robust dividend growth rate, appears sustainable given the company's prudent payout ratio and solid profitability. The financial growth metrics, including revenue, EPS, and EBITDA growth rates, provide further assurance of SLM Corp's capability to maintain and potentially increase its dividends. Investors considering SLM Corp for its dividend prospects should also weigh these factors and monitor the company's ongoing financial health and market position. For those seeking additional high-dividend yield opportunities, GuruFocus Premium offers a tailored High Dividend Yield Screener to discover stocks that meet specific investment criteria.
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.
