Insights into Compass Group PLC's Upcoming Dividend Payment and Financial Health
Compass Group PLC (CMPGY, Financial) recently announced a dividend of $0.36 per share, payable on 2024-03-11, with the ex-dividend date set for 2024-01-18. 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 Compass Group PLC's dividend performance and assess its sustainability.
What Does Compass Group PLC Do?
Compass Group is the largest food-service company globally, operating in more than 50 countries with annual sales of more than GBP 25 billion. Compass Group's model stems from operating on-premises catering facilities, rather than centralized industrial kitchens. Food service is Compass Group's core focus and contributes more than 80% of revenue. In addition, the company provides support services to clients through activities including cleaning services, office services (for example, concierge services), grounds maintenance, and so on.
A Glimpse at Compass Group PLC's Dividend History
Compass Group PLC has maintained a consistent dividend payment record since 2022. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Compass Group PLC's Dividend Yield and Growth
As of today, Compass Group PLC currently has a 12-month trailing dividend yield of 1.63% and a 12-month forward dividend yield of 1.92%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Compass Group PLC's annual dividend growth rate was 11.30%. Based on Compass Group PLC's dividend yield and five-year growth rate, the 5-year yield on cost of Compass Group PLC stock as of today is approximately 1.63%.
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 2023-09-30, Compass Group PLC's dividend payout ratio is 0.49.
Compass Group PLC's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Compass Group PLC's profitability 7 out of 10 as of 2023-09-30, 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. Compass Group PLC'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 Compass Group PLC's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Compass Group PLC's revenue has increased by approximately 13.90% per year on average, a rate that outperforms approximately 84.97% 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, Compass Group PLC's earnings increased by approximately 67.70% per year on average, a rate that outperforms approximately 95.63% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 0.80%, which outperforms approximately 40.19% of global competitors.
Next Steps
Considering Compass Group PLC's consistent dividend payments, robust dividend growth rate, moderate payout ratio, strong profitability, and solid growth metrics, the company presents an attractive profile for value investors focused on dividend income. These factors together suggest a favorable outlook for the sustainability of Compass Group PLC's dividends. Investors seeking to expand their portfolio with high-dividend yield stocks can utilize tools such as the High Dividend Yield Screener available to GuruFocus Premium users. As Compass Group PLC continues to navigate the complexities of the global food-service industry, it remains a noteworthy candidate for those focused on long-term income generation.
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.
