Yahoo Finance Eastman Chemical Co's Dividend Analysis
Exploring the Sustainability and Growth of Eastman Chemical Co's Dividends
Eastman Chemical Co (NYSE:EMN) recently announced a dividend of $0.81 per share, payable on 2024-07-09, with the ex-dividend date set for 2024-06-17. 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 Eastman Chemical Co's dividend performance and assess its sustainability.
What Does Eastman Chemical Co Do?
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Established in 1920 to produce chemicals for Eastman Kodak, Eastman Chemical has grown into a global specialty chemical company with manufacturing sites around the world. The company generates the majority of its sales outside of the United States, with a strong presence in Asian markets. During the past several years, Eastman has sold noncore businesses, choosing to focus on higher-margin specialty product offerings.
A Glimpse at Eastman Chemical Co's Dividend History
Eastman Chemical Co has maintained a consistent dividend payment record since 1994. Dividends are currently distributed on a quarterly basis.
Eastman Chemical Co has increased its dividend each year since 1998. The stock is thus listed as a dividend aristocrat, an honor that is given to companies that have increased their dividend each year for at least the past 26 years.
Breaking Down Eastman Chemical Co's Dividend Yield and Growth
As of today, Eastman Chemical Co currently has a 12-month trailing dividend yield of 3.22% and a 12-month forward dividend yield of 3.26%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Eastman Chemical Co's annual dividend growth rate was 6.00%. Extended to a five-year horizon, this rate increased to 6.70% per year. And over the past decade, Eastman Chemical Co's annual dividends per share growth rate stands at 9.70%.
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 2024-03-31, Eastman Chemical Co's dividend payout ratio is 0.50.
Eastman Chemical Co's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Eastman Chemical Co's profitability 7 out of 10 as of 2024-03-31, suggesting good profitability prospects. The company has reported positive net income for each of 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. Eastman Chemical Co'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 Eastman Chemical Co's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Eastman Chemical Co's revenue has increased by approximately 7.50% per year on average, a rate that underperforms than approximately 53.03% 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, Eastman Chemical Co's earnings increased by approximately 1.30% per year on average, a rate that underperforms than approximately 54.17% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -1.60%, which underperforms than approximately 68.24% of global competitors.
Conclusion
Considering Eastman Chemical Co's consistent dividend payments, increasing growth rate, and stable payout ratio, the company demonstrates a reliable dividend profile. However, the underperformance in revenue and earnings growth compared to its global competitors raises questions about long-term sustainability. Investors should weigh these factors carefully. For those looking to explore other high-dividend yield opportunities, GuruFocus Premium users can use 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.