Insights into Elisa Oyj's Upcoming Dividend and Financial Health
Elisa Oyj (ELMUY, Financial) recently announced a dividend of $0.61 per share, payable on 2024-05-08, with the ex-dividend date set for 2024-04-15. 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 Elisa Oyj's dividend performance and assess its sustainability.
What Does Elisa Oyj Do?
Elisa Oyj is a telecommunications company that operates in two segments, Consumer Customers and Corporate Customers. The Consumer Customers segment provides consumers with telecommunications and communications services, such as fixed and mobile subscriptions with supplementary digital services, cable TV subscriptions, Elisa Viihde entertainment service, and Elisa Kirja e-reading service. The Corporate Customers segment provides corporate and public administration organizations with services such as IT and communication solutions for the digital environment as well as fixed and mobile subscriptions. The majority of revenue is generated from the Consumer Customers segment. The company generates the majority of its revenue in Finland.
A Glimpse at Elisa Oyj's Dividend History
Elisa Oyj has maintained a consistent dividend payment record since 2010. Dividends are currently distributed on a yearly basis. Elisa Oyj has increased its dividend each year since 2014. 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 10 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Elisa Oyj's Dividend Yield and Growth
As of today, Elisa Oyj currently has a 12-month trailing dividend yield of 4.95% and a 12-month forward dividend yield of 2.58%. This suggests an expectation of decreased dividend payments over the next 12 months. Over the past three years, Elisa Oyj's annual dividend growth rate was 5.10%. Extended to a five-year horizon, this rate increased to 5.40% per year. And over the past decade, Elisa Oyj's annual dividends per share growth rate stands at 5.80%.
Based on Elisa Oyj's dividend yield and five-year growth rate, the 5-year yield on cost of Elisa Oyj stock as of today is approximately 6.44%.
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, Elisa Oyj's dividend payout ratio is 0.91, which may suggest that the company's dividend may not be sustainable.
Elisa Oyj's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Elisa Oyj'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. Elisa Oyj'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 Elisa Oyj's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Elisa Oyj's revenue has increased by approximately 4.70% per year on average, a rate that outperforms approximately 52.32% 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, Elisa Oyj's earnings increased by approximately 4.20% per year on average, a rate that outperforms approximately 46.1% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 4.30%, which outperforms approximately 43.6% of global competitors, indicates a stable financial base for future dividends.
Next Steps
In conclusion, Elisa Oyj's upcoming dividend, alongside its historical growth and current financial health, suggests a company committed to rewarding shareholders. With a strong dividend track record, a yield that outpaces many global competitors, and robust profitability and growth metrics, Elisa Oyj appears to be in a solid position to continue its dividend payments. However, investors should keep an eye on the payout ratio which, if it remains high, could signal potential challenges in maintaining dividend sustainability. As always, it is important for investors to perform their due diligence and consider whether Elisa Oyj aligns with their investment strategy and goals. For those seeking high-dividend yield opportunities, GuruFocus Premium users can utilize the High Dividend Yield Screener for further research.
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.
