Yahoo Finance Argan Inc's Dividend Analysis
Understanding Argan Inc's Dividend Sustainability and Growth
Argan Inc (NYSE:AGX) recently announced a dividend of $0.30 per share, payable on 2024-04-30, with the ex-dividend date set for 2024-04-19. 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 Argan Inc's dividend performance and assess its sustainability.
What Does Argan Inc Do?
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Argan Inc is a United States-based construction firm that conducts operations through its wholly-owned subsidiaries, GPS, APC, TRC, and SMC. Through GPS and APC it provides a full range of engineering, procurement, construction, commissioning, maintenance, project development, and technical consulting services to the power generation market, including the renewable energy sector, for a wide range of customers, including independent power project owners, public utilities, power plant heavy equipment suppliers, and other commercial firms with power requirements in the U.S., Ireland, and the U.K. It operates in three segments: Power Services, Industrial Services, and Telecom Services, out of which Power Services derive the majority of revenue.
A Glimpse at Argan Inc's Dividend History
Argan 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 Argan Inc's Dividend Yield and Growth
As of today, Argan Inc currently has a 12-month trailing dividend yield of 1.80% and a 12-month forward dividend yield of 1.96%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Argan Inc's annual dividend growth rate was 3.20%. Extended to a five-year horizon, this rate decreased to 1.40% per year. Based on Argan Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Argan Inc stock as of today is approximately 1.93%.
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 2024-01-31, Argan Inc's dividend payout ratio is 0.46. Argan Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Argan Inc's profitability 8 out of 10 as of 2024-01-31, 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. Argan 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 Argan Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Argan Inc's revenue has increased by approximately 19.50% per year on average, a rate that outperforms approximately 83.16% 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, Argan Inc's earnings increased by approximately 16.50% per year on average, a rate that outperforms approximately 61.9% of global competitors.
Concluding Thoughts on Argan Inc's Dividend Profile
Considering Argan Inc's consistent dividend payments, modest dividend growth rate, manageable payout ratio, strong profitability, and robust growth metrics, investors may find confidence in the company's ability to maintain and potentially increase its dividend payouts in the future. The combination of a reliable dividend history and promising growth prospects makes Argan Inc an interesting consideration for value investors focused on income-generating stocks. As always, it is crucial to perform comprehensive research and consider individual investment goals and risk tolerance before making investment decisions. 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.
