Yahoo Finance Hennes & Mauritz AB's Dividend Analysis
Exploring the Sustainability and Growth of Hennes & Mauritz AB's Dividends
Overview of the Upcoming Dividend
Hennes & Mauritz AB (HNNMY) recently announced a dividend of $0.06 per share, payable on 2024-05-28, with the ex-dividend date set for 2024-05-06. 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 Hennes & Mauritz AB's dividend performance and assess its sustainability.
What Does Hennes & Mauritz AB Do?
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Hennes & Mauritz is a global multibrand fashion conglomerate that was founded in 1947. Its flagship H&M brand accounts for most of the revenue, but the newer brands (COS, &Other Stories, Monki, Weekday, and newly launched Arket) are growing a bit faster. H&M commands a low-single-digit market share in a fragmented global apparel market. Just under 70% of revenue is generated in Europe and Africa, 14% in Asia and Oceania, and 23% in North and South America. The company operates around 4,400 stores globally, of which 3,947 are H&M-brand stores.
A Glimpse at Hennes & Mauritz AB's Dividend History
Hennes & Mauritz AB has maintained a consistent dividend payment record since 2021. Dividends are currently distributed on a bi-annual basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Hennes & Mauritz AB's Dividend Yield and Growth
As of today, Hennes & Mauritz AB currently has a 12-month trailing dividend yield of 3.92% and a 12-month forward dividend yield of 3.89%. This suggests an expectation of slightly decreased dividend payments over the next 12 months. Based on Hennes & Mauritz AB's dividend yield and five-year growth rate, the 5-year yield on cost of Hennes & Mauritz AB stock as of today is approximately 3.92%.
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 2024-02-29, Hennes & Mauritz AB's dividend payout ratio is 1.12, which may suggest that the company's dividend may not be sustainable. Hennes & Mauritz AB's profitability rank offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Hennes & Mauritz AB's profitability 7 out of 10 as of 2024-02-29, suggesting good profitability prospects. The company has reported positive net income for each 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. Hennes & Mauritz AB's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Revenue is the lifeblood of any company, and Hennes & Mauritz AB's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Hennes & Mauritz AB's revenue has increased by approximately 8.60% per year on average, outperforming approximately 62.36% 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, Hennes & Mauritz AB's earnings increased by approximately 92.80% per year on average, outperforming approximately 93.51% of global competitors. Lastly, the company's 5-year EBITDA growth rate of -9.70%, which outperforms approximately 22.36% of global competitors.
Conclusion
Considering Hennes & Mauritz AB's consistent dividend payments, robust growth metrics, and a solid profitability track record, the company presents a compelling case for dividend investors. However, the slightly high payout ratio warrants cautious optimism regarding the sustainability of future dividends. Investors should keep an eye on the company's future earnings reports and any potential market shifts. To explore more high-dividend yield opportunities, GuruFocus Premium users can use 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.
This article first appeared on GuruFocus.
