Assessing the Sustainability and Growth of SEI Investments Co's Dividends
SEI Investments Co (SEIC, Financial) recently announced a dividend of $0.46 per share, payable on 2024-01-09, with the ex-dividend date set for 2023-12-27. 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 SEI Investments Co's dividend performance and assess its sustainability.
What Does SEI Investments Co Do?
SEI Investments provides investment processing, management, and operations services to financial institutions, asset managers, asset owners, and financial advisors in four material segments: private banks, investment advisors, institutional investors, and investment managers. SEI also has a minority interest in LSV Asset Management, a value equity asset manager with about $99 billion in assets under management. As of December 2022, SEI (including LSV) manages, administers, or advises on over $1.2 trillion in assets.
A Glimpse at SEI Investments Co's Dividend History
SEI Investments Co has maintained a consistent dividend payment record since 1988. Dividends are currently distributed on a bi-annual basis. SEI Investments Co has increased its dividend each year since 1990. The stock is thus listed as a dividend aristocrat, an honor that is given to companies that have increased their dividend each year for at least the past 33 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down SEI Investments Co's Dividend Yield and Growth
As of today, SEI Investments Co currently has a 12-month trailing dividend yield of 1.33% and a 12-month forward dividend yield of 1.42%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, SEI Investments Co's annual dividend growth rate was 6.90%. Extended to a five-year horizon, this rate increased to 7.30% per year. And over the past decade, SEI Investments Co's annual dividends per share growth rate stands at 9.00%.
Based on SEI Investments Co's dividend yield and five-year growth rate, the 5-year yield on cost of SEI Investments Co stock as of today is approximately 1.89%.
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 2023-09-30, SEI Investments Co's dividend payout ratio is 0.26.
SEI Investments Co's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks SEI Investments Co's profitability 10 out of 10 as of 2023-09-30, 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. SEI Investments Co'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 SEI Investments Co's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. SEI Investments Co's revenue has increased by approximately 10.80% per year on average, a rate that outperforms approximately 58.47% 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, SEI Investments Co's earnings increased by approximately 2.60% per year on average, a rate that outperforms approximately 43.05% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 6.50%, which outperforms approximately 48.74% of global competitors.
Concluding Thoughts on SEI Investments Co's Dividend Profile
In summary, SEI Investments Co's consistent dividend history, combined with a solid growth outlook, positions it as a potentially attractive stock for value investors seeking sustainable income. The company's ability to grow dividends, maintain a low payout ratio, and demonstrate strong profitability and growth metrics underlines the health of its dividend distributions. As investors consider SEI Investments Co for their portfolios, the data suggests that the company is well-positioned to continue its history of dividend growth. However, it's crucial to keep an eye on the broader economic landscape and any changes in the company's financial health that could impact its dividend sustainability. For further research and investment screening, GuruFocus Premium users can utilize 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.
