Assessing Aker ASA’s Dividend Sustainability and Growth
Aker ASA (AKAAF) recently announced a dividend of $15.5 per share, payable on 2024-04-29, with the ex-dividend date set for 2024-04-18. 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 Aker ASA’s dividend performance and assess its sustainability.
What Does Aker ASA Do?
Aker ASA is an industrial investment company that develops businesses and exercises active ownership to create value for its shareholders and society at large. The portfolio has focused on companies in oil and gas, maritime assets, seafood/marine biotechnology, and real estate sectors. Investments are broken down into two portfolios; Industrial holdings are strategic assets and are managed with a long-term perspective. It comprises Aker’s ownership interests in Aker BP, Aker Energy, Aker Solutions, Aker Horizons, Aker BioMarine, SalMar Aker Ocean, Cognite, and Aize, and Financial investments comprise cash, other assets, and the listed companies Akastor, AMSC, Philly Shipyard, and Solstad Offshore, in addition to ICP and Aker Property Group.
A Glimpse at Aker ASA’s Dividend History
Aker ASA (AKAAF) has maintained a consistent dividend payment record since 2018. Dividends are currently distributed on a bi-annual basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Aker ASA’s Dividend Yield and Growth
As of today, Aker ASA (AKAAF) currently has a 12-month trailing dividend yield of 4.79% and a 12-month forward dividend yield of 5.09%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Aker ASA’s annual dividend growth rate was 8.50%. Extended to a five-year horizon, this rate increased to 9.90% per year. And over the past decade, Aker ASA’s annual dividends per share growth rate stands at an impressive 11.90%.
Based on Aker ASA’s dividend yield and five-year growth rate, the 5-year yield on cost of Aker ASA stock as of today is approximately 7.68%.
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, Aker ASA’s dividend payout ratio is 0.39.
Aker ASA’s profitability rank, offers an understanding of the company’s earnings prowess relative to its peers. GuruFocus ranks Aker ASA’s profitability 5 out of 10 as of 2023-12-31, suggesting fair profitability. The company has reported net profit in 7 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. Aker ASA’s growth rank of 5 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and Aker ASA’s revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Aker ASA’s revenue has increased by approximately 54.10% per year on average, a rate that outperforms approximately 93.54% of global competitors.
Concluding Insights on Aker ASA’s Dividend Profile
In conclusion, Aker ASA’s recent dividend announcement reflects the company’s commitment to shareholder returns. The historical dividend growth rate, coupled with a reasonable payout ratio and fair profitability, bodes well for the sustainability of future dividends. Aker ASA’s growth metrics, including a strong revenue growth rate, further bolster confidence in the company’s ability to maintain its dividend payments. Investors considering Aker ASA for its dividend prospects have several positive indicators, but as always, should perform their due diligence, considering their investment strategy and the inherent risks of the market. For those seeking to expand their portfolio with high-dividend yield stocks, the High Dividend Yield Screener available to GuruFocus Premium users could be a valuable tool.
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.
