Yahoo Finance TE Connectivity Ltd's Dividend Analysis
Exploring the Sustainability and Growth of TE Connectivity's Dividends
TE Connectivity Ltd (NYSE:TEL) recently announced a dividend of $0.65 per share, payable on June 7, 2024, with the ex-dividend date set for May 23, 2024. 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 delve into TE Connectivity Ltd's dividend performance and assess its sustainability.
What Does TE Connectivity Ltd Do?
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TE Connectivity Ltd is the world's largest supplier of electrical connectors, providing interconnect and sensor solutions across transportation, industrial, and communications markets. Operating in 150 countries with over 500,000 stock-keeping units, TE Connectivity's extensive portfolio supports the electrical architecture of its customers' innovative developments.
A Glimpse at TE Connectivity Ltd's Dividend History
Since 2007, TE Connectivity Ltd has maintained a consistent dividend payment record, distributing dividends quarterly. The company has increased its dividend annually since 2007, earning it the status of a dividend achievera title awarded to companies that have raised their dividends annually for at least the past 17 years. Below is a chart showing the annual Dividends Per Share to track historical trends.
Breaking Down TE Connectivity Ltd's Dividend Yield and Growth
Currently, TE Connectivity Ltd boasts a 12-month trailing dividend yield of 1.57% and a forward dividend yield of 1.72%, indicating an expected increase in dividend payments over the next 12 months. Over the past three years, the annual dividend growth rate was 7.00%, which slowed to 6.20% over a five-year period and stood at 8.90% over the past decade. As of today, the 5-year yield on cost for TE Connectivity Ltd stock is approximately 2.12%.
The Sustainability Question: Payout Ratio and Profitability
To evaluate the sustainability of the dividend, it is crucial to consider the company's payout ratio. TE Connectivity Ltd's dividend payout ratio is 0.33 as of March 31, 2024, suggesting that a significant portion of earnings is retained for future growth and to buffer against downturns. The company's profitability rank is 8 out of 10, reflecting strong earnings capabilities relative to its peers, with net profit reported in 9 of the past 10 years.
Growth Metrics: The Future Outlook
TE Connectivity Ltd's growth rank of 8 out of 10 indicates a robust growth trajectory. The company's revenue per share and 3-year revenue growth rate of 11.30% annually outperforms approximately 73.16% of global competitors. The 3-year EPS growth rate of 54.10% per year and the 5-year EBITDA growth rate of 4.30% further underscore the company's ability to sustain dividend payments.
Conclusion
TE Connectivity Ltd's consistent dividend growth, supported by a solid payout ratio and robust profitability and growth metrics, presents a compelling case for investors seeking stable dividend income. As the company continues to expand and innovate within its industry, the prospects for future dividend growth appear promising. For those interested in exploring further, GuruFocus Premium offers tools like the High Dividend Yield Screener to discover high-yield investment opportunities.
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.
