Understanding the Dividend Dynamics of Rockwool AS (RKWBF, Financial)
Rockwool AS (RKWBF) recently announced a dividend of $43 per share, payable on 2024-04-15, with the ex-dividend date set for 2024-04-11. 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 Rockwool AS's dividend performance and assess its sustainability.
What Does Rockwool AS Do?
Rockwool AS manufactures and sells building materials, including insulation, and roofing systems. The company organizes itself into two segments based on the product: Insulation and Systems. The Insulation segment, which generates the majority of revenue, sells building, industrial, and technical insulation and external thermal insulation wall systems to the construction industry. The Systems business sells acoustic ceilings and wall systems, external cladding systems, horticultural substrate solutions, engineered fiber solutions, and noise and vibration control to the construction and automotive industries. The majority of sales come from Europe.
A Glimpse at Rockwool AS's Dividend History
Rockwool AS has maintained a consistent dividend payment record since 2018. Dividends are currently distributed on a yearly basis.
Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Rockwool AS's Dividend Yield and Growth
As of today, Rockwool AS currently has a 12-month trailing dividend yield of 1.59% and a 12-month forward dividend yield of 1.94%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Rockwool AS's annual dividend growth rate was 3.20%. Extended to a five-year horizon, this rate increased to 6.90% per year. And over the past decade, Rockwool AS's annual dividends per share growth rate stands at an impressive 16.40%.
Based on Rockwool AS's dividend yield and five-year growth rate, the 5-year yield on cost of Rockwool AS stock as of today is approximately 2.22%.
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, Rockwool AS's dividend payout ratio is 0.26.
Rockwool AS's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Rockwool AS's profitability 8 out of 10 as of 2023-12-31, 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. Rockwool AS'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 Rockwool AS's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Rockwool AS's revenue has increased by approximately 12.00% per year on average, a rate that outperforms approximately 70.16% 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, Rockwool AS's earnings increased by approximately 15.70% per year on average, a rate that outperforms approximately 61.49% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 5.50%, which outperforms approximately 50.06% of global competitors.
Next Steps
Considering Rockwool AS's strong dividend payments, consistent dividend growth rate, prudent payout ratio, robust profitability, and favorable growth metrics, the company stands as a potentially attractive option for value investors focused on dividend income. The sustainability of its dividends is underpinned by a solid financial foundation and a promising growth outlook. Investors seeking to diversify their portfolio with a stock that offers both income and growth potential may find Rockwool AS (RKWBF, Financial) to be a compelling choice.
For those looking to explore 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.
