Yahoo Finance SLM Corp's Dividend Analysis
An In-depth Look at SLM Corp's Dividend Sustainability and Growth Prospects
SLM Corp (NASDAQ:SLM) recently announced a dividend of $0.11 per share, payable on 2024-06-17, with the ex-dividend date set for 2024-06-06. 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 SLM Corp's dividend performance and assess its sustainability.
What Does SLM Corp Do?
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SLM Corp is the largest student lender in the country. It makes and holds student loans through the guaranteed Federal Family Education Loan Program as well as through private channels. It also engages in debt-management operations, including accounts receivable and collections services, and runs college savings programs.
A Glimpse at SLM Corp's Dividend History
SLM Corp has maintained a consistent dividend payment record since 2019. Dividends are currently distributed on a quarterly basis.
Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down SLM Corp's Dividend Yield and Growth
As of today, SLM Corp currently has a 12-month trailing dividend yield of 2.07% and a 12-month forward dividend yield of 2.07%, suggesting an expectation of same dividend payments over the next 12 months.
Over the past three years, SLM Corp's annual dividend growth rate was 54.20%.
Based on SLM Corp's dividend yield and five-year growth rate, the 5-year yield on cost of SLM Corp stock as of today is approximately 2.07%.
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, SLM Corp's dividend payout ratio is 0.14.
SLM Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks SLM Corp's profitability 6 out of 10 as of 2024-03-31, suggesting fair profitability. 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. SLM Corp's growth rank of 6 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and SLM Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. SLM Corp's revenue has increased by approximately 18.50% per year on average, a rate that outperforms approximately 67.9% 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. During the past three years, SLM Corp's earnings increased by approximately 2.60% per year on average, a rate that outperforms approximately 36.96% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 17.10%, which outperforms approximately 72.13% of global competitors.
Conclusion
SLM Corp has demonstrated a robust framework for sustaining and growing its dividends. With a reasonable payout ratio, consistent profitability, and solid growth metrics, SLM appears well-positioned to continue rewarding its shareholders. Investors should consider these factors when evaluating SLM Corp as a potential addition to their investment portfolios focused on dividend income.
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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.
