Assessing the Upcoming Dividend and Financial Health of Avery Dennison Corp
Avery Dennison Corp (NYSE:AVY) recently announced a dividend of $0.81 per share, payable on 2024-03-20, with the ex-dividend date set for 2024-03-05. 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 Avery Dennison Corp's dividend performance and assess its sustainability.
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Avery Dennison manufactures pressure-sensitive materials, merchandise tags, and labels. The company also runs a specialty converting business that produces radio-frequency identification, or RFID, inlays and labels. Avery Dennison draws a significant amount of revenue from outside the United States, with international operations accounting for the majority of total sales.
Avery Dennison Corp's Dividend Analysis
A Glimpse at Avery Dennison Corp's Dividend History
Avery Dennison Corp has maintained a consistent dividend payment record since 1986. Dividends are currently distributed on a quarterly basis.
Avery Dennison Corp has increased its dividend each year since 2010. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 14 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Avery Dennison Corp's Dividend Analysis
Breaking Down Avery Dennison Corp's Dividend Yield and Growth
As of today, Avery Dennison Corp currently has a 12-month trailing dividend yield of 1.47% and a 12-month forward dividend yield of 1.50%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Avery Dennison Corp's annual dividend growth rate was 10.50%. Extended to a five-year horizon, this rate decreased to 9.60% per year. And over the past decade, Avery Dennison Corp's annual dividends per share growth rate stands at an impressive 10.60%.
Based on Avery Dennison Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Avery Dennison Corp stock as of today is approximately 2.32%.
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 2023-12-31, Avery Dennison Corp's dividend payout ratio is 0.41.
Avery Dennison Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Avery Dennison Corp's profitability 8 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported positive net income for each of 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. Avery Dennison Corp's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Avery Dennison Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Avery Dennison Corp's revenue has increased by approximately 7.60% per year on average, a rate that outperforms approximately 54.79% 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, Avery Dennison Corp's earnings increased by approximately 3.70% per year on average, a rate that outperforms approximately 43.31% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 12.50%, which outperforms approximately 62.56% of global competitors.
Investing in Avery Dennison Corp's Dividend Future
In conclusion, Avery Dennison Corp's consistent dividend history, combined with a solid dividend growth rate, suggests a commitment to returning value to shareholders. The company's manageable payout ratio and strong profitability rank indicate a sustainable dividend policy. Moreover, Avery Dennison Corp's impressive growth metrics provide a positive outlook for future dividend sustainability and potential increases. For value investors seeking a stock with a reliable dividend and the potential for growth, Avery Dennison Corp presents an attractive option.
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.
