Sonoco Products Co's Dividend Analysis
Understanding the Dividend Prospects of Sonoco Products Co
Sonoco Products Co (NYSE:SON) recently announced a dividend of $0.51 per share, payable on 2024-03-08, with the ex-dividend date set for 2024-02-27. 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 Sonoco Products Co's dividend performance and assess its sustainability.
What Does Sonoco Products Co Do?
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Over its 100-year-plus history, Sonoco Products has steadily assembled a diverse portfolio of industrial and consumer packaging product offerings such as flexible and rigid plastics, reels and spools, pallets, and composite cans. The company serves a variety of consumer and industrial end markets throughout North America. Sonoco has raised its dividend each year for more than 30 years.
A Glimpse at Sonoco Products Co's Dividend History
Sonoco Products Co has maintained a consistent dividend payment record since 1981. Dividends are currently distributed on a quarterly basis.
Sonoco Products Co has increased its dividend each year since 1981. 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 43 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Sonoco Products Co's Dividend Yield and Growth
As of today, Sonoco Products Co currently has a 12-month trailing dividend yield of 3.52% and a 12-month forward dividend yield of 3.55%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Sonoco Products Co's annual dividend growth rate was 5.50%. Extended to a five-year horizon, this rate decreased to 4.40% per year. And over the past decade, Sonoco Products Co's annual dividends per share growth rate stands at 5.00%.
Based on Sonoco Products Co's dividend yield and five-year growth rate, the 5-year yield on cost of Sonoco Products Co stock as of today is approximately 4.37%.
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, Sonoco Products Co's dividend payout ratio is 0.38.