Yahoo Finance Spire Inc's Dividend Analysis
Exploring the Sustainability and Growth of Spire Inc's Dividends
Spire Inc (NYSE:SR) recently announced a dividend of $0.76 per share, payable on 2024-07-02, with the ex-dividend date set for 2024-06-11. 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 Spire Inc's dividend performance and assess its sustainability.
What Does Spire Inc Do?
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Spire Inc is a public utility holding company with three reportable business segments: Gas Utility, Gas Marketing, and Midstream. The Gas Utility segment includes the regulated operations of Laclede Gas, Alabama Gas Corporation (Alagasco), and EnergySouth Inc. The Utilities businesses operations include the purchase, retail, distribution, and sale of natural gas in Missouri, Alabama, and Mississippi. The Gas Utility segment generates a majority of the company's revenue but is subject to seasonal fluctuations. The Gas Marketing segment includes Laclede Energy Resources, Inc, whose operations include the marketing of natural gas and related activities on a non-regulated basis and the Midstream segment includes transportation and storage of natural gas.
A Glimpse at Spire Inc's Dividend History
Spire Inc has maintained a consistent dividend payment record since 1984. Dividends are currently distributed on a quarterly basis. Spire Inc has increased its dividend each year since 1985. 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 39 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Spire Inc's Dividend Yield and Growth
As of today, Spire Inc currently has a 12-month trailing dividend yield of 4.94% and a 12-month forward dividend yield of 5.06%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Spire Inc's annual dividend growth rate was 5.00%. Extended to a five-year horizon, this rate remained the same. And over the past decade, Spire Inc's annual dividends per share growth rate stands at 5.70%. Based on Spire Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Spire Inc stock as of today is approximately 6.30%.
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. As of 2024-03-31, Spire Inc's dividend payout ratio is 0.76, suggesting that the company's dividend may not be sustainable. Spire Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Spire Inc'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. Spire Inc'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 Spire Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Spire Inc's revenue has increased by approximately 11.90% per year on average, a rate that outperforms approximately 63.13% 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, Spire Inc's earnings increased by approximately 0.80% per year on average, a rate that outperforms approximately 35.88% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 1.50%, which outperforms approximately 35.31% of global competitors.
Next Steps
Considering Spire Inc's consistent dividend payments, growth in dividend rates, and robust profitability and growth metrics, the company presents a compelling case for dividend investors. However, the sustainability of such dividends, as indicated by the payout ratio, warrants careful monitoring. Investors should consider these factors alongside their investment strategy and risk tolerance. 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.
