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Lanxess AG's Dividend Analysis

Exploring the Sustainability and Growth of Lanxess AG's Dividends

Lanxess AG (LNXSY) recently announced a dividend of $0.02 per share, payable on 2024-06-13, with the ex-dividend date set for 2024-05-28. 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 Lanxess AG's dividend performance and assess its sustainability.

What Does Lanxess AG Do?

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Lanxess is a German chemical company that was originally spun out of Bayer. Lanxess has visibly decommoditized its portfolio in recent years by divesting its synthetic rubber business and is moving toward becoming a specialty chemicals company in the fields of consumer protection chemicals, specialty additives, intermediates, and engineering plastics.

Lanxess AG's Dividend Analysis
Lanxess AG's Dividend Analysis

A Glimpse at Lanxess AG's Dividend History

Lanxess AG has maintained a consistent dividend payment record since 2021. Dividends are currently distributed on a yearly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.

Lanxess AG's Dividend Analysis
Lanxess AG's Dividend Analysis

Breaking Down Lanxess AG's Dividend Yield and Growth

As of today, Lanxess AG currently has a 12-month trailing dividend yield of 4.10% and a 12-month forward dividend yield of 0.39%. This suggests an expectation of decreased dividend payments over the next 12 months.

Over the past three years, Lanxess AG's annual dividend growth rate was 3.40%. Extended to a five-year horizon, this rate increased to 5.50% per year. And over the past decade, Lanxess AG's annual dividends per share growth rate stands at 6.10%.

Based on Lanxess AG's dividend yield and five-year growth rate, the 5-year yield on cost of Lanxess AG stock as of today is approximately 5.36%.

Lanxess AG's Dividend Analysis
Lanxess AG'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 2024-03-31, Lanxess AG's dividend payout ratio is 0.24.

Lanxess AG's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Lanxess AG's profitability 7 out of 10 as of 2024-03-31, 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

To ensure the sustainability of dividends, a company must have robust growth metrics. Lanxess AG'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 Lanxess AG's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Lanxess AG's revenue has increased by approximately 3.30% per year on average, a rate that underperforms approximately 66.64% of global competitors.

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.