Insight into the Upcoming Dividend Payment and Historical Performance
ABM Industries Inc(ABM, Financial) recently announced a dividend of $0.23 per share, payable on 2024-05-06, with the ex-dividend date set for 2024-04-03. 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 ABM Industries Inc's dividend performance and assess its sustainability.
What Does ABM Industries Inc Do?
ABM Industries Inc is a provider of integrated facility solutions. It offers its solutions through five segments: Business and Industry, Manufacturing and Distribution, Education, Aviation, and Technical solutions. The company derives the majority of its revenue from the business and industry segment, which encompasses janitorial, facilities engineering, and parking services for commercial real estate properties and sports and entertainment venues, as well as vehicle maintenance and other services to rental car providers. The company mainly operates in the United States of America.
A Glimpse at ABM Industries Inc's Dividend History
ABM Industries Inc has maintained a consistent dividend payment record since 1968. Dividends are currently distributed on a quarterly basis. ABM Industries Inc has increased its dividend each year since 1968. The stock is thus listed as a dividend king, an honor that is given to companies that have increased their dividend each year for at least the past 56 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down ABM Industries Inc's Dividend Yield and Growth
As of today, ABM Industries Inc currently has a 12-month trailing dividend yield of 1.97% and a 12-month forward dividend yield of 2.01%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, ABM Industries Inc's annual dividend growth rate was 5.90%. Extended to a five-year horizon, this rate decreased to 4.10% per year. And over the past decade, ABM Industries Inc's annual dividends per share growth rate stands at 3.40%.
Based on ABM Industries Inc's dividend yield and five-year growth rate, the 5-year yield on cost of ABM Industries Inc stock as of today is approximately 2.41%.
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 2024-01-31, ABM Industries Inc's dividend payout ratio is 0.27.
ABM Industries Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks ABM Industries Inc's profitability 8 out of 10 as of 2024-01-31, suggesting good profitability prospects. The company has reported positive net income for each of 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. ABM Industries Inc's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and ABM Industries Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. ABM Industries Inc's revenue has increased by approximately 11.10% per year on average, a rate that outperforms approximately 64.93% 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, ABM Industries Inc's earnings increased by approximately 24.60% per year on average, a rate that outperforms approximately 70.1% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 14.10%, which outperforms approximately 64.94% of global competitors.
Next Steps
In conclusion, ABM Industries Inc's consistent dividend payments, robust dividend growth rate, conservative payout ratio, strong profitability, and positive growth metrics paint a promising picture for current and prospective investors. The company's ability to maintain and grow its dividend over a span of decades underlines its financial health and commitment to shareholder returns. As ABM Industries Inc continues to navigate the complexities of the facility services industry, its financial solidity and growth prospects suggest that it could remain a compelling choice for value investors focused on income generation. Will ABM Industries Inc continue its legacy as a dividend king, and what might this mean for your investment strategy?
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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.
