An In-Depth Look at the Upcoming Dividend from Santos Ltd (SSLZY, Financial)
Santos Ltd (SSLZY) recently announced a dividend of $0.18 per share, payable on 2024-04-03, with the ex-dividend date set for 2024-03-01. 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 Santos Ltd's dividend performance and assess its sustainability.
What Does Santos Ltd Do?
Santos Ltd was founded in 1954, with its name standing for South Australia Northern Territory Oil Search. The company made its mark with the discovery of gas in the Cooper Basin in 1963 and began supplying gas by 1969. Despite facing challenges due to reliance on the Cooper Basin and the decline of the Moomba field, Santos Ltd has experienced a resurgence. This revival was largely due to its ventures into liquefied natural gas (LNG), transforming coal seam gas into LNG in Queensland, and converting conventional gas to LNG in Papua New Guinea.
A Glimpse at Santos Ltd's Dividend History
Santos Ltd has maintained a consistent dividend payment record since 2018, with dividends distributed bi-annually. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Santos Ltd's Dividend Yield and Growth
As of today, Santos Ltd currently has a 12-month trailing dividend yield of 4.98% and a 12-month forward dividend yield of 5.52%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Santos Ltd's annual dividend growth rate was 55.70%. Extended to a five-year horizon, this rate decreased to 38.30% per year. Based on Santos Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Santos Ltd stock as of today is approximately 25.20%.
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 2023-12-31, Santos Ltd's dividend payout ratio is 0.55.
Santos Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Santos Ltd's profitability 6 out of 10 as of 2023-12-31, suggesting fair profitability. The company has reported net profit in 5 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Santos Ltd's growth rank of 6 out of 10 suggests that the company has a fair growth outlook. Revenue is the lifeblood of any company, and Santos Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Santos Ltd's revenue has increased by approximately 7.50% per year on average, a rate that underperforms approximately 60.4% of global competitors.
Concluding Thoughts on Santos Ltd's Dividend Profile
Considering Santos Ltd's consistent dividend payments, robust dividend growth rate, reasonable payout ratio, and fair profitability and growth metrics, the company presents a compelling case for value investors with an eye for income-generating stocks. The upcoming dividend payment adds another layer of attractiveness to Santos Ltd's investment profile. However, investors should always weigh these factors against their personal investment strategy and market conditions. 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.
