Telia Company AB's Dividend Analysis
Assessing the Sustainability and Growth of Telia Company AB's Dividends
Telia Company AB (TLSNY) recently announced a dividend of $0.1 per share, payable on 2024-02-23, with the ex-dividend date set for 2024-02-02. 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 Telia Company AB's dividend performance and assess its sustainability.
What Does Telia Company AB Do?
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Telia Company AB is the incumbent telecommunications operator in Sweden but is also present in Norway, Finland, Denmark, and the Baltic countries. In the past five years, Telia Company AB has been narrowing its business focus, divesting businesses in Asia and focusing on its core markets. In 2022, Telia Company AB had revenue of more than SEK 90 billion, with the majority of it coming from the Nordic markets.
A Glimpse at Telia Company AB's Dividend History
Telia Company AB has maintained a consistent dividend payment record since 2009. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Telia Company AB's Dividend Yield and Growth
As of today, Telia Company AB currently has a 12-month trailing dividend yield of 5.57% and a 12-month forward dividend yield of 7.51%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Telia Company AB's annual dividend growth rate was -4.60%. Extended to a five-year horizon, this rate increased to -1.60% per year. And over the past decade, Telia Company AB's annual dividends per share growth rate stands at -4.70%.
Based on Telia Company AB's dividend yield and five-year growth rate, the 5-year yield on cost of Telia Company AB stock as of today is approximately 5.14%.
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 2023-09-30, Telia Company AB's dividend payout ratio is 0.00.
Telia Company AB's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Telia Company AB's profitability 7 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported net profit in 8 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Telia Company AB'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 Telia Company AB's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Telia Company AB's revenue has increased by approximately 3.00% per year on average, a rate that underperforms than approximately 50.27% 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, Telia Company AB's earnings increased by approximately -55.40% per year on average, a rate that underperforms than approximately 95.47% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -38.20%, which underperforms than approximately 99.05% of global competitors.
Concluding Thoughts on Telia Company AB's Dividend Profile
When considering Telia Company AB's dividend payments, investors should weigh the company's historical commitment to dividends against its negative growth rates and low profitability metrics. While the forward dividend yield suggests optimism for increased payouts, the negative growth rates in dividends per share, earnings, and EBITDA present concerns for long-term dividend sustainability. Investors must balance these factors with Telia Company AB's solid profitability rank and its strategic focus on core markets. As Telia Company AB navigates through its industry's competitive and regulatory environment, value investors should continue to monitor the company's financial health and dividend policy for any signs of change that could affect their investment decisions. 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.
