Assessing the Upcoming Dividend and Historical Performance of Swisscom AG
Swisscom AG (SCMWY, Financial) recently announced a dividend of $2.49 per share, payable on a date yet to be announced, with the ex-dividend date set for 2024-04-02. 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 Swisscom AG's dividend performance and assess its sustainability.
What Does Swisscom AG Do?
Swisscom is the incumbent telecom operator in Switzerland, with a high market share in both the mobile and fixed-line markets. It charges high prices compared with its competitors and other European peers due to the historical stability of the Swiss telecom market and a favorable regulatory environment. It also owns Fastweb in Italy, which has a broadband network and operates as a wireless reseller.
A Glimpse at Swisscom AG's Dividend History
Swisscom AG has maintained a consistent dividend payment record since 1999, distributing dividends on a yearly basis. A look at the historical trends of Dividends Per Share can give investors insight into the company's commitment to returning value to shareholders.
Breaking Down Swisscom AG's Dividend Yield and Growth
As of today, Swisscom AG currently has a 12-month trailing dividend yield of 3.91% and a 12-month forward dividend yield of 4.05%. This suggests an expectation of increased dividend payments over the next 12 months.
Based on Swisscom AG's dividend yield and five-year growth rate, the 5-year yield on cost of Swisscom AG stock as of today is approximately 3.91%.
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. As of 2023-12-31, Swisscom AG's dividend payout ratio is 0.64, which indicates a balanced approach between distributing earnings and retaining funds for future growth and downturns.
Swisscom AG's profitability rank of 7 out of 10, as of 2023-12-31, suggests good profitability prospects. The company has consistently reported positive net income for each year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
For dividends to be sustainable, a company must exhibit robust growth metrics. Swisscom AG's growth rank of 7 out of 10 indicates a positive growth trajectory relative to its competitors.
Swisscom AG's revenue per share and 3-year revenue growth rate reflect a strong revenue model, despite a slight average annual decrease of 0.10%. This rate underperforms approximately 67.76% of global competitors. The company's 3-year EPS growth rate of 3.70% per year on average, although below the performance of approximately 56.09% of global competitors, still demonstrates an ability to increase earnings. Lastly, the 5-year EBITDA growth rate of 1.10% underperforms about 65.71% of global competitors, indicating room for improvement.
Next Steps
Swisscom AG's commitment to shareholder returns is evident through its consistent dividend payments and the anticipation of a dividend increase. While the company's payout ratio and profitability rank point to a sustainable dividend policy, growth metrics indicate potential areas for improvement. Investors should consider these factors when evaluating Swisscom AG's dividends in the context of their investment strategy. For those seeking high-dividend yield opportunities, GuruFocus Premium users have access to 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.
