African Rainbow Minerals Ltd's Dividend Analysis
In This Article:
Understanding the Dividend Prospects of African Rainbow Minerals Ltd
African Rainbow Minerals Ltd (AFBOF) recently announced a dividend of $6 per share, payable on 2024-04-08, with the ex-dividend date set for 2024-04-03. 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 African Rainbow Minerals Ltd's dividend performance and assess its sustainability.
What Does African Rainbow Minerals Ltd Do?
-
This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
-
How to calculate the intrinsic value of a stock?
African Rainbow Minerals Ltd is a South African diversified mining and minerals company. The group has various operating divisions: platinum, ferrous, coal, copper, and corporate. In addition, African Rainbow Minerals has an investment in gold through its shareholding in Harmony. Ferrous is the group's largest division, contributing roughly half of group revenue, closely trailed by the platinum division. The platinum division includes the Two Rivers Platinum Mine as a 51% subsidiary and an interest in the Modikwa Platinum Mine. The ferrous division comprises Assmang as a 50% joint venture, which includes iron ore, manganese, and chrome operations.
A Glimpse at African Rainbow Minerals Ltd's Dividend History
African Rainbow Minerals Ltd 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 African Rainbow Minerals Ltd's Dividend Yield and Growth
As of today, African Rainbow Minerals Ltd currently has a 12-month trailing dividend yield of 16.63% and a 12-month forward dividend yield of 7.60%. This suggests an expectation of decreased dividend payments over the next 12 months. Over the past three years, African Rainbow Minerals Ltd's annual dividend growth rate was 34.40%. Extended to a five-year horizon, this rate decreased to 32.70% per year. And over the past decade, African Rainbow Minerals Ltd's annual dividends per share growth rate stands at an impressive 25.30%.
Based on African Rainbow Minerals Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of African Rainbow Minerals Ltd stock as of today is approximately 68.43%.
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, African Rainbow Minerals Ltd's dividend payout ratio is 0.76, which may suggest that the company's dividend may not be sustainable.