Yahoo Finance MTN Group Ltd's Dividend Analysis
Assessing the Sustainability of MTN Group Ltd's Upcoming Dividend
MTN Group Ltd (MTNOY) recently announced a dividend of $0.17 per share, payable on 2024-05-02, with the ex-dividend date set for 2024-04-18. 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 MTN Group Ltd's dividend performance and assess its sustainability.
What Does MTN Group Ltd Do?
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MTN Group Ltd is a mobile telecommunications provider operating across South Africa, Nigeria, Ghana, Cameroon, Ivory Coast, Uganda, Syria, and Sudan. Most of the company's revenue is earned in South Africa and Nigeria. The company also has a joint venture in Iran. From a product perspective, most of its revenue is from voice and data. Other contributors include SMS and sale of devices revenue. MTN also provides enterprise services to small/midsize enterprises and corporate clients. The company owns the mobile infrastructure and data centers. Its segments include Network services, Mobile devices, Inter-connect and roaming, Digital and fintech and others.
A Glimpse at MTN Group Ltd's Dividend History
MTN Group Ltd has maintained a consistent dividend payment record since 2022. Dividends are currently distributed on a yearly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down MTN Group Ltd's Dividend Yield and Growth
As of today, MTN Group Ltd currently has a 12-month trailing dividend yield of 3.98% and a 12-month forward dividend yield of 3.86%. This suggests an expectation of decreased dividend payments over the next 12 months. Over the past three years, MTN Group Ltd's annual dividend growth rate was -2.40%. Based on MTN Group Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of MTN Group Ltd stock as of today is approximately 3.98%.
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, MTN Group Ltd's dividend payout ratio is 1.04, which may suggest that the company's dividend may not be sustainable. MTN Group Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks MTN Group Ltd's profitability 8 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported net profit in 9 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. MTN Group Ltd'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 MTN Group Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. MTN Group Ltd's revenue has increased by approximately 6.80% per year on average, a rate that outperforms approximately 61.96% 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, MTN Group Ltd's earnings increased by approximately -25.20% per year on average, a rate that outperforms approximately 12.66% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 7.60%, which outperforms approximately 54.25% of global competitors.
Engaging Conclusion: Evaluating MTN Group Ltd's Dividend Outlook
Considering MTN Group Ltd's consistent dividend history, current yield, and growth metrics, value investors may find the upcoming dividend payment a compelling reason to evaluate the stock further. While the dividend payout ratio raises questions about sustainability, the company's strong profitability and growth rankings suggest a solid foundation for future performance. Investors are encouraged to consider both the risks and opportunities presented by MTN Group Ltd's financial health and market position. Will MTN Group Ltd continue to be a reliable source of dividends for shareholders? Value investors may find this an opportune moment to delve deeper into the company's financials and strategic direction. 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.
