Assessing The Sustainability of The Mosaic Co's Upcoming Dividend
The Mosaic Co ( NYSE:MOS) recently announced a dividend of $0.21 per share, payable on 2024-03-21, with the ex-dividend date set for 2024-03-06.
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 The Mosaic Co's dividend performance and assess its sustainability.Formed in 2004 by the combination of IMC Global and Cargill's fertilizer business, Mosaic is one of the largest phosphate and potash producers in the world. The company's assets include phosphate rock mines in Florida, Brazil, and Peru and potash mines in Saskatchewan, New Mexico, and Brazil. Mosaic also runs a large fertilizer distribution operation in Brazil through its Mosiac Fertilizantes business, which the company acquired from Vale in 2018.
The Mosaic Co's Dividend Analysis
A Glimpse at The Mosaic Co's Dividend HistoryThe Mosaic Co has maintained a consistent dividend payment record since 2008. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down The Mosaic Co's Dividend Yield and GrowthAs of today, The Mosaic Co currently has a 12-month trailing dividend yield of 2.56% and a 12-month forward dividend yield of 2.68%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, The Mosaic Co's annual dividend growth rate was 58.70%. Extended to a five-year horizon, this rate decreased to 50.10% per year. And over the past decade, The Mosaic Co's annual dividends per share growth rate stands at -10.50%.
Based on The Mosaic Co's dividend yield and five-year growth rate, the 5-year yield on cost of The Mosaic Co stock as of today is approximately 19.50%.
The Mosaic Co's Dividend Analysis
The Sustainability Question: Payout Ratio and ProfitabilityTo 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, The Mosaic Co's dividend payout ratio is 0.22.
The Mosaic Co's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks The Mosaic Co's profitability 8 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported net profit in 8 years out of the past 10 years.
Growth Metrics: The Future OutlookTo ensure the sustainability of dividends, a company must have robust growth metrics. The Mosaic Co'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 The Mosaic Co's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. The Mosaic Co's revenue has increased by approximately 21.80% per year on average, a rate that outperforms approximately 68.28% 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, The Mosaic Co's earnings increased by approximately 24.00% per year on average, a rate that outperforms approximately 51.23% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 54.50%, which outperforms approximately 90.85% of global competitors.
Engaging Conclusion: The Mosaic Co's Dividend OutlookIn conclusion, The Mosaic Co's upcoming dividend, consistent historical payments, and a strong yield growth trajectory present an attractive opportunity for value investors. The company's low payout ratio coupled with high profitability and growth ranks indicate a sustainable dividend policy. Investors should also note The Mosaic Co's robust revenue and earnings growth, which further support the likelihood of continued dividend payouts. As the company progresses, it remains a noteworthy candidate for portfolios seeking steady income with growth potential. Will The Mosaic Co continue to meet the expectations of dividend-seeking investors in the years to come?
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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.
Mosaic acquired the rest of Vale’s phosphate assets in Brazil, Vale’s stake in Peru’s Bayóvar mine and Canada’s Kronau potash project.
Mosaic has yet to decide whether to include Rio Colorado potash project in Argentina in the acquisition. |
