Assessing the Upcoming Dividend and Historical Performance
Republic Services Inc (RSG, Financial) recently announced a dividend of $0.54 per share, payable on 2024-04-15, with the ex-dividend date set for 2024-04-01. 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 Republic Services Inc's dividend performance and assess its sustainability.
What Does Republic Services Inc Do?
Republic Services Inc is the second largest integrated provider of traditional solid waste services in the United States, operating roughly 206 active landfills and 233 transfer stations. The company serves residential, commercial, and industrial end markets. It also runs a sizable recycling operation in North America.
A Glimpse at Republic Services Inc's Dividend History
Republic Services Inc has maintained a consistent dividend payment record since 2003. Dividends are currently distributed on a quarterly basis. Republic Services Inc has increased its dividend each year since 2003. 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 21 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Republic Services Inc's Dividend Yield and Growth
As of today, Republic Services Inc currently has a 12-month trailing dividend yield of 1.08% and a 12-month forward dividend yield of 1.12%. This suggests an expectation of increased dividend payments over the next 12 months. However, Republic Services Inc's dividend yield of 1.08% is near a 10-year low and underperforms 75.21% of global competitors in the Waste Management industry, suggesting that the company's dividend yield may not be a compelling proposition for income investors.
Over the past three years, Republic Services Inc's annual dividend growth rate was 7.50%. Extended to a five-year horizon, this rate decreased to 7.30% per year. And over the past decade, Republic Services Inc's annual dividends per share growth rate stands at 7.50%. Based on Republic Services Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Republic Services Inc stock as of today is approximately 1.54%.
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, Republic Services Inc's dividend payout ratio is 0.37.
Republic Services Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Republic Services Inc's profitability 9 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported positive net income for each of 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. Republic Services Inc'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 Republic Services Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Republic Services Inc's revenue has increased by approximately 14.20% per year on average, a rate that outperforms approximately 67.96% 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, Republic Services Inc's earnings increased by approximately 16.40% per year on average, a rate that outperforms approximately 61.4% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 13.20%, which outperforms approximately 58.04% of global competitors.
Next Steps
With a strong track record of dividend payments, a consistent history of growth, and a healthy payout ratio, Republic Services Inc stands out as a potentially robust option for value investors seeking stable income. The company's solid profitability and favorable growth metrics further reinforce the likelihood of its dividends being sustained in the future. As you consider adding Republic Services Inc to your investment portfolio, reflect on how its dividend performance aligns with your financial goals. Are you looking for steady income, or is growth a higher priority? How does Republic Services Inc fit into your broader investment strategy? For those interested in exploring further, 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.
