Assessing the Sustainability and Growth of Gildan Activewear Inc's Dividends
Gildan Activewear Inc (GIL, Financial) recently announced a dividend of $0.21 per share, payable on 2024-04-08, with the ex-dividend date set for 2024-03-12. 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 Gildan Activewear Inc's dividend performance and assess its sustainability.
What Does Gildan Activewear Inc Do?
Gildan is a vertically integrated designer and manufacturer of basic apparel, including T-shirts, underwear, socks, and hosiery. Its primary market is the sale of blank T-shirts, sweatshirts, and other apparel to wholesalers, major clothing brands, and printers (printwear). Gildan also sells branded clothing through retail and direct-to-consumer channels. Brands include Gildan, American Apparel, Comfort Colors, and Gold Toe. Gildan produces most of its clothing at factories in Latin America and recently began operating a new plant in Bangladesh. Incorporated in 1984, the Montreal-based company operates internationally but generates nearly 90% of its sales in the U.S.
A Glimpse at Gildan Activewear Inc's Dividend History
Gildan Activewear Inc has maintained a consistent dividend payment record since 2011. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Gildan Activewear Inc's Dividend Yield and Growth
As of today, Gildan Activewear Inc currently has a 12-month trailing dividend yield of 2.18% and a 12-month forward dividend yield of 2.41%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Gildan Activewear Inc's annual dividend growth rate was 71.70%. Extended to a five-year horizon, this rate decreased to 13.40% per year. And over the past decade, Gildan Activewear Inc's annual dividends per share growth rate stands at an impressive 13.90%.
Based on Gildan Activewear Inc's dividend yield and five-year growth rate, the 5-year yield on cost for Gildan Activewear Inc stock as of today is approximately 4.09%.
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, Gildan Activewear Inc's dividend payout ratio is 0.29.
Gildan Activewear Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Gildan Activewear Inc'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 the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Gildan Activewear 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 Gildan Activewear Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Gildan Activewear Inc's revenue has increased by approximately 23.90% per year on average, a rate that outperforms approximately 88.44% of global competitors.
Engaging Conclusion
In conclusion, Gildan Activewear Inc's consistent dividend payments, impressive growth rate, and prudent payout ratio, paired with strong profitability and growth metrics, paint a picture of a company with a sustainable dividend policy. This is an attractive feature for value investors looking for steady income streams. However, as with any investment, it is essential to consider the broader economic environment and sector-specific challenges that could affect future payouts. Will Gildan Activewear Inc continue to deliver value to its shareholders in the form of dividends? That remains a question for investors to ponder as they assess the company's performance against their investment criteria. For those seeking high-dividend yield opportunities, GuruFocus Premium users can utilize the High Dividend Yield Screener to discover other potential investments.
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.
