Exploring the Sustainability and Growth of Pentair PLC's Dividends
Pentair PLC (PNR, Financial) recently announced a dividend of $0.23 per share, payable on 2024-05-03, 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 Pentair PLC's dividend performance and assess its sustainability.
What Does Pentair PLC Do?
Pentair is a global leader in the water treatment industry, with 10,000 employees and a presence in 25 countries. Pentair's business is organized into three segments: pool, water technologies, and flow. The company offers a wide range of water solutions, including energy-efficient swimming pool equipment, filtration solutions, and commercial and industrial pumps. Pentair generated approximately $4.1 billion in revenue in 2023.
A Glimpse at Pentair PLC's Dividend History
Pentair PLC has maintained a consistent dividend payment record since 1989. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Pentair PLC's Dividend Yield and Growth
As of today, Pentair PLC currently has a 12-month trailing dividend yield of 1.13% and a 12-month forward dividend yield of 1.17%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Pentair PLC's annual dividend growth rate was 5.00%. Extended to a five-year horizon, this rate decreased to -1.10% per year. And over the past decade, Pentair PLC's annual dividends per share growth rate stands at -4.20%. Based on Pentair PLC's dividend yield and five-year growth rate, the 5-year yield on cost of Pentair PLC stock as of today is approximately 1.07%.
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, Pentair PLC's dividend payout ratio is 0.25.
Pentair PLC's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Pentair PLC's profitability 7 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. Pentair 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 Pentair PLC's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Pentair PLC's revenue has increased by approximately 11.00% per year on average, a rate that outperforms approximately 60.06% 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, Pentair PLC's earnings increased by approximately 20.70% per year on average, a rate that outperforms approximately 61.7% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 14.50%, which outperforms approximately 64.15% of global competitors.
Next Steps
In conclusion, Pentair PLC's upcoming dividend payment reflects its history of consistent shareholder returns. While the dividend growth rate has seen some variability, the current payout ratio indicates a balance between distributing earnings and retaining capital for growth. The company's solid profitability and favorable growth metrics bode well for the future sustainability of its dividends. Investors considering Pentair PLC as a potential addition to their dividend portfolios should also weigh these factors alongside their investment strategy and market conditions. Will Pentair PLC continue its history of rewarding shareholders, and how will its strategic initiatives influence future dividend growth? These are critical considerations for value investors looking at Pentair PLC's dividend prospects.
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.
