It appears to be like like Group 1 Automotive, Inc. (NYSE:GPI) is about to go ex-dividend within the subsequent 3 days. The ex-dividend date is one enterprise day earlier than the file date, which is the closing date for shareholders to be current on the corporate’s books to be eligible for a dividend cost. The ex-dividend date is of consequence as a result of at any time when a inventory is purchased or offered, the commerce takes a minimum of two enterprise day to settle. In different phrases, buyers can buy Group 1 Automotive’s shares earlier than the thirty first of August as a way to be eligible for the dividend, which might be paid on the fifteenth of September.
The corporate’s subsequent dividend cost might be US$0.38 per share. Final yr, in complete, the corporate distributed US$1.52 to shareholders. Calculating the final yr’s price of funds reveals that Group 1 Automotive has a trailing yield of 0.8% on the present share worth of $185.83. Dividends are an vital supply of revenue to many shareholders, however the well being of the enterprise is essential to sustaining these dividends. That is why we should always at all times test whether or not the dividend funds seem sustainable, and if the corporate is rising.
View our newest evaluation for Group 1 Automotive
Dividends are sometimes paid from firm earnings. If an organization pays extra in dividends than it earned in revenue, then the dividend may very well be unsustainable. Group 1 Automotive paid out simply 3.4% of its revenue final yr, which we expect is conservatively low and leaves loads of margin for surprising circumstances. But money stream is often extra vital than revenue for assessing dividend sustainability, so we should always at all times test if the corporate generated sufficient money to afford its dividend. Fortunately it paid out simply 3.2% of its free money stream final yr.
It is encouraging to see that the dividend is roofed by each revenue and money stream. This usually suggests the dividend is sustainable, so long as earnings do not drop precipitously.
Click on right here to see the corporate’s payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Rising?
Corporations with constantly rising earnings per share usually make one of the best dividend shares, as they often discover it simpler to develop dividends per share. If earnings fall far sufficient, the corporate may very well be pressured to chop its dividend. It is encouraging to see Group 1 Automotive has grown its earnings quickly, up 48% a yr for the previous 5 years. Group 1 Automotive appears to be like like an actual progress firm, with earnings per share rising at a cracking tempo and the corporate reinvesting most of its income within the enterprise.
One other key approach to measure an organization’s dividend prospects is by measuring its historic fee of dividend progress. Prior to now 10 years, Group 1 Automotive has elevated its dividend at roughly 11% a yr on common. It is thrilling to see that each earnings and dividends per share have grown quickly over the previous few years.
To Sum It Up
Ought to buyers purchase Group 1 Automotive for the upcoming dividend? Group 1 Automotive has grown its earnings per share whereas concurrently reinvesting within the enterprise. Sadly it is lower the dividend a minimum of as soon as up to now 10 years, however the conservative payout ratio makes the present dividend look sustainable. Group 1 Automotive appears to be like stable on this evaluation general, and we would undoubtedly think about investigating it extra intently.
On that be aware, you will wish to analysis what dangers Group 1 Automotive is going through. To that finish, it’s best to be taught concerning the 3 warning indicators we have noticed with Group 1 Automotive (together with 1 which is a bit regarding).
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This text by Merely Wall St is normal in nature. We offer commentary based mostly on historic knowledge and analyst forecasts solely utilizing an unbiased methodology and our articles usually are not meant to be monetary recommendation. It doesn’t represent a suggestion to purchase or promote any inventory, and doesn’t take account of your aims, or your monetary scenario. We purpose to convey you long-term centered evaluation pushed by basic knowledge. Word that our evaluation could not issue within the newest price-sensitive firm bulletins or qualitative materials. Merely Wall St has no place in any shares talked about.
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