Yahoo Finance eBay Inc's Dividend Analysis
Exploring the Sustainability and Growth of eBay Inc's Dividends
eBay Inc(NASDAQ:EBAY) recently announced a dividend of $0.27 per share, payable on 2024-06-14, with the ex-dividend date set for 2024-05-31. 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 eBay Inc's dividend performance and assess its sustainability.
What Does eBay Inc Do?
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eBay operates one of the largest e-commerce marketplaces in the world, with $73 billion in 2023 gross merchandise volume, or GMV, rendering the firm a top 10 global e-commerce company. The company generates revenue from listing fees, advertising, revenue-sharing arrangements with service providers, and managed payments, with its platform connecting more than 130 million buyers and roughly 20 million sellers across almost 190 global markets at the end of 2023. eBay generates just north of 50% of its GMV in international markets, with a large presence in the UK, Germany, and Australia.
A Glimpse at eBay Inc's Dividend History
eBay Inc has maintained a consistent dividend payment record since 2019. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down eBay Inc's Dividend Yield and Growth
As of today, eBay Inc currently has a 12-month trailing dividend yield of 1.93% and a 12-month forward dividend yield of 2.03%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, eBay Inc's annual dividend growth rate was 16.00%. Based on eBay Inc's dividend yield and five-year growth rate, the 5-year yield on cost of eBay Inc stock as of today is approximately 1.93%.
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 2024-03-31, eBay Inc's dividend payout ratio is 0.25.
eBay Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks eBay Inc's profitability 8 out of 10 as of 2024-03-31, suggesting good profitability prospects. The company has reported net profit in 8 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. eBay 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 eBay Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. eBay Inc's revenue has increased by approximately 15.30% per year on average, a rate that outperforms approximately 73.22% 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, eBay Inc's earnings increased by approximately 20.10% per year on average, a rate that outperforms approximately 62.64% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 22.80%, which outperforms approximately 75.58% of global competitors.
Conclusion
eBay Inc's robust dividend growth, conservative payout ratio, and strong profitability and growth metrics paint a promising picture for the future of its dividend payments. These factors not only support the sustainability of current dividend levels but also suggest potential for future increases, making eBay Inc an attractive option for dividend-seeking investors. For those looking to expand their portfolio with high-dividend yield stocks, consider using the High Dividend Yield Screener available to GuruFocus Premium users.
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.
