Yahoo Finance Intercorp Financial Services Inc's Dividend Analysis
Assessing the Sustainability of Intercorp Financial Services Inc's Dividend
Intercorp Financial Services Inc (NYSE:IFS) recently announced a dividend of $1 per share, payable on 2024-04-29, with the ex-dividend date set for 2024-04-17. 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 Intercorp Financial Services Inc's dividend performance and assess its sustainability.
What Does Intercorp Financial Services Inc Do?
This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
How to calculate the intrinsic value of a stock?
Intercorp Financial Services Inc is a provider of financial services through banking, insurance, and wealth management businesses, as well as the recent integration of Izipay enhancing its payments ecosystem. The company has four operating segments; the Banking segment includes Mainly loans, credit facilities, deposits, and current accounts, the Insurance segment provides life annuity products with single-premium payment and conventional life insurance products and other retail insurance products, the Wealth management segment provides brokerage and investment management services, and Payments segment provides administration services, operation and processing of credit and debit cards. Its geographical segments include Peru and Panama.
A Glimpse at Intercorp Financial Services Inc's Dividend History
Intercorp Financial Services Inc has maintained a consistent dividend payment record since 2020. Dividends are currently distributed on a yearly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Intercorp Financial Services Inc's Dividend Yield and Growth
As of today, Intercorp Financial Services Inc currently has a 12-month trailing dividend yield of 5.28% and a 12-month forward dividend yield of 4.54%. This suggests an expectation of decrease dividend payments over the next 12 months.
Over the past three years, Intercorp Financial Services Inc's annual dividend growth rate was -9.60%. Extended to a five-year horizon, this rate increased to 1.00% per year.
Based on Intercorp Financial Services Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Intercorp Financial Services Inc stock as of today is approximately 5.55%.
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, Intercorp Financial Services Inc's dividend payout ratio is 0.49.
Intercorp Financial Services Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Intercorp Financial Services Inc's profitability 6 out of 10 as of 2023-12-31, suggesting fair profitability. 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. Intercorp Financial Services Inc's growth rank of 6 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and Intercorp Financial Services Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Intercorp Financial Services Inc's revenue has increased by approximately 4.80% per year on average, a rate that underperforms than approximately 59.7% 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, Intercorp Financial Services Inc's earnings increased by approximately 34.90% per year on average, a rate that underperforms than approximately 18.95% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 4.70%, which underperforms than approximately 60.68% of global competitors.
Next Steps
In conclusion, while Intercorp Financial Services Inc's dividend payments have been consistent, the company's dividend growth rate and payout ratio indicate a cautious approach to dividend distribution. The fair profitability and growth metrics suggest a balanced outlook for sustainability. As value investors consider the future prospects of Intercorp Financial Services Inc, they should weigh the company's ability to maintain its dividend in the face of industry trends, regulatory factors, and its strategic initiatives. Will Intercorp Financial Services Inc continue to provide a reliable income stream for its shareholders? That remains a question worth exploring as we observe the company's performance in the dynamic financial services sector.
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.
This article first appeared on GuruFocus.
