Yahoo Finance Atco Ltd's Dividend Analysis
Exploring the Sustainability and Growth of Atco Ltd's Dividends
Atco Ltd (ACLLF) recently announced a dividend of $0.49 per share, payable on 2024-06-30, with the ex-dividend date set for 2024-05-30. 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 Atco Ltd's dividend performance and assess its sustainability.
What Does Atco Ltd Do?
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Atco Ltd is a Canadian holding company that offers gas, electric, and infrastructure solutions. The largest subsidiary of the company is Canadian utilities, which operates natural gas, electricity, and logistical services. Atco's primary segments include Structures and Logistics, ATCO Energy Systems, ATCO EnPower, and Corporate and Other. It generates maximum revenue from the ATCO Energy Systems segment. Geographically, it derives most of its revenue from Canada.
A Glimpse at Atco Ltd's Dividend History
Atco Ltd has maintained a consistent dividend payment record since 2003, with dividends currently distributed on a quarterly basis. Atco Ltd has increased its dividend each year since 2006, earning it the status of a dividend achievera title given to companies that have increased their dividend annually for at least the past 18 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Atco Ltd's Dividend Yield and Growth
Atco Ltd currently has a 12-month trailing dividend yield of 4.93% and a 12-month forward dividend yield of 4.94%, indicating an expectation of increased dividend payments over the next 12 months. Over the past three years, Atco Ltd's annual dividend growth rate was 3.00%, which increased to 4.70% per year over a five-year horizon, and an impressive 10.10% over the past decade. Based on Atco Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Atco Ltd stock as of today is approximately 6.20%.
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. As of 2024-03-31, Atco Ltd's dividend payout ratio is 0.55, suggesting a healthy balance between paying dividends and retaining earnings for growth. Atco Ltd's profitability rank of 7 out of 10, combined with a decade of positive net income, underscores its solid profitability.
Growth Metrics: The Future Outlook
Atco Ltd's growth rank of 7 out of 10 indicates a strong growth trajectory relative to its competitors. Its revenue per share and 3-year revenue growth rate of 6.70% per year, although slightly underperforming against global competitors, still demonstrates a robust revenue model. The company's 3-year EPS growth rate and 5-year EBITDA growth rate further solidify its capacity for sustaining dividends in the long run.
Conclusion: A Reliable Dividend Payer with Promising Growth Prospects
Atco Ltd's consistent dividend increases, strong payout ratio, and solid profitability metrics paint the picture of a reliable dividend payer with promising growth prospects. Investors seeking to explore high-dividend yield stocks can utilize the High Dividend Yield Screener available to GuruFocus Premium users.
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.
