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Jefferies Financial Group Inc's Dividend Analysis

Exploring the Sustainability and Growth of Dividends at Jefferies Financial Group Inc

Jefferies Financial Group Inc (NYSE:JEF) recently announced a dividend of $0.3 per share, payable on 2024-05-30, with the ex-dividend date set for 2024-05-17. 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 Jefferies Financial Group Inc's dividend performance and assess its sustainability.

What Does Jefferies Financial Group Inc Do?

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Jefferies Financial Group Inc is a diversified financial services company. It has two reportable segments; Investment Banking and Capital Markets which is also the majority revenue generating segment, includes securities, commodities, corporate lending, futures and foreign exchange capital markets activities and its investment banking business, which provides underwriting and financial advisory services to clients across different sectors. The Asset Management reportable business segment provides alternative investment management services to investors in the U.S. and overseas and generates investment income from capital invested in and managed by it or its affiliated asset managers.

Jefferies Financial Group Inc's Dividend Analysis
Jefferies Financial Group Inc's Dividend Analysis

A Glimpse at Jefferies Financial Group Inc's Dividend History

Jefferies Financial Group Inc has maintained a consistent dividend payment record since 2010. Dividends are currently distributed on a quarterly basis.

Below is a chart showing annual Dividends Per Share for tracking historical trends.

Jefferies Financial Group Inc's Dividend Analysis
Jefferies Financial Group Inc's Dividend Analysis

Breaking Down Jefferies Financial Group Inc's Dividend Yield and Growth

As of today, Jefferies Financial Group Inc currently has a 12-month trailing dividend yield of 2.53% and a 12-month forward dividend yield of 2.53%. This suggests an expectation of same dividend payments over the next 12 months.

Over the past three years, Jefferies Financial Group Inc's annual dividend growth rate was 26.00%. Extended to a five-year horizon, this rate increased to 31.40% per year. And over the past decade, Jefferies Financial Group Inc's annual dividends per share growth rate stands at an impressive 20.40%.

Based on Jefferies Financial Group Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Jefferies Financial Group Inc stock as of today is approximately 9.91%.

Jefferies Financial Group Inc's Dividend Analysis
Jefferies Financial Group Inc's Dividend Analysis

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 2024-02-29, Jefferies Financial Group Inc's dividend payout ratio is 0.84. And this may suggest that the company's dividend may not be sustainable.

Jefferies Financial Group Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Jefferies Financial Group Inc's profitability 8 out of 10 as of 2024-02-29, 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. Jefferies Financial Group 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 Jefferies Financial Group Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Jefferies Financial Group Inc's revenue has increased by approximately 9.50% per year on average, a rate that outperforms than approximately 60.12% 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, Jefferies Financial Group Inc's earnings increased by approximately -25.40% per year on average, a rate that outperforms than approximately 17.92% of global competitors.

Next Steps

Considering Jefferies Financial Group Inc's consistent dividend payments, robust growth rates, and solid profitability metrics, the company presents a compelling case for dividend investors. While the payout ratio might raise some concerns about sustainability, the company's strong financial health could mitigate these worries. Investors should keep an eye on future earnings reports and market conditions, which could influence dividend sustainability and growth 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.

This article first appeared on GuruFocus.