Yahoo Finance Graco Inc's Dividend Analysis
Delving into the Dividend Details of Graco Inc
Graco Inc (NYSE:GGG) recently announced a dividend of $0.26 per share, payable on 2024-05-01, with the ex-dividend date set for 2024-04-12. 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 Graco Inc's dividend performance and assess its sustainability.
What Does Graco Inc Do?
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Graco manufactures equipment used for managing fluids, coatings, and adhesives, specializing in difficult-to-handle materials. Graco's business is organized into three segments: industrial, process, and contractor. The Minnesota-based firm serves a wide range of end markets, including industrial, automotive, and construction, and its broad array of products include pumps, valves, meters, sprayers, and equipment used to apply coatings, sealants, and adhesives. The firm generated roughly $2.2 billion in sales in 2023.
A Glimpse at Graco Inc's Dividend History
Graco Inc has maintained a consistent dividend payment record since 1985, with dividends currently distributed on a quarterly basis. Graco Inc has increased its dividend each year since 1998, earning it the prestigious title of dividend aristocrat, a designation reserved for companies with at least 26 consecutive years of dividend increases. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Graco Inc's Dividend Yield and Growth
As of today, Graco Inc currently has a 12-month trailing dividend yield of 1.05% and a 12-month forward dividend yield of 1.11%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Graco Inc's annual dividend growth rate was 10.30%. Extending to a five-year horizon, this rate increased to 11.30% per year, and over the past decade, Graco Inc's annual dividends per share growth rate stands at an impressive 11.10%. Based on Graco Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Graco Inc stock as of today is approximately 1.79%.
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, Graco Inc's dividend payout ratio is 0.31. Graco Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Graco Inc's profitability 9 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
For dividends to be sustainable, a company must demonstrate robust growth metrics. Graco Inc's growth rank of 9 out of 10 suggests a strong growth trajectory relative to competitors. Graco Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model, with an average annual increase of approximately 9.90%, outperforming about 56.9% 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, with an average annual increase of approximately 16.00%, outperforming about 55.43% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 10.80%, outperforms about 56.31% of global competitors.
Next Steps
Graco Inc's consistent dividend payments, robust dividend growth rate, prudent payout ratio, strong profitability, and solid growth metrics paint a picture of a company that is committed to rewarding shareholders and positioned for future success. These factors make Graco Inc an attractive option for value investors seeking reliable dividend income and potential for capital appreciation. As Graco Inc continues to navigate the fluid management industry with strategic initiatives and innovation, investors can expect the company to maintain its dividend aristocrat status and possibly deliver even more shareholder value in the years to come. 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.
