Unpacking the Dividend Profile of Sabine Royalty Trust (NYSE:SBR)
Sabine Royalty Trust (NYSE:SBR) recently announced a dividend of $0.44 per share, payable on 2024-01-30, with the ex-dividend date set for 2024-01-12. 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 Sabine Royalty Trust's dividend performance and assess its sustainability.
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Sabine Royalty Trust is an express trust which is formed to receive Sabine Corporation's royalty and mineral interests, including landowner's royalties, overriding royalty interests, minerals production payments, and any other similar, non-participatory interest, in certain Royalty Properties. The trust's producing and proved undeveloped oil and gas royalty properties are located in Florida, Louisiana, Mississippi, New Mexico, Oklahoma, and Texas.
Sabine Royalty Trust's Dividend Analysis
A Glimpse at Sabine Royalty Trust's Dividend History
Sabine Royalty Trust has maintained a consistent dividend payment record since 1985. Dividends are currently distributed on a monthly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Sabine Royalty Trust's Dividend Yield and Growth
As of today, Sabine Royalty Trust currently has a 12-month trailing dividend yield of 9.82% and a 12-month forward dividend yield of 9.55%. This suggests an expectation of decreased dividend payments over the next 12 months.
Over the past three years, Sabine Royalty Trust's annual dividend growth rate was 40.70%. Extended to a five-year horizon, this rate decreased to 20.20% per year. And over the past decade, Sabine Royalty Trust's annual dividends per share growth rate stands at 2.80%.
Based on Sabine Royalty Trust's dividend yield and five-year growth rate, the 5-year yield on cost of Sabine Royalty Trust stock as of today is approximately 24.64%.
Sabine Royalty Trust's Dividend Analysis
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 2023-09-30, Sabine Royalty Trust's dividend payout ratio is 1.00, which may suggest that the company's dividend may not be sustainable.
Sabine Royalty Trust's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Sabine Royalty Trust's profitability 9 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Sabine Royalty Trust's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Sabine Royalty Trust's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Sabine Royalty Trust's revenue has increased by approximately 39.10% per year on average, a rate that outperforms approximately 88.21% 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, Sabine Royalty Trust's earnings increased by approximately 40.70% per year on average, a rate that outperforms approximately 69.67% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 20.40%, which outperforms approximately 68.59% of global competitors, further underscores its strong growth potential.
Engaging Conclusion
In conclusion, Sabine Royalty Trust's upcoming dividend, historical payouts, and growth rates paint a complex picture for investors. While the trust's dividend history is robust, the payout ratio raises questions about sustainability. However, the strong profitability and growth metrics provide a counterbalance, suggesting that Sabine Royalty Trust may continue to deliver value to its shareholders. As value investors look to balance yield with security, it's essential to consider all these factors. Will Sabine Royalty Trust's dividends continue to be a lighthouse for income-focused investors in the choppy waters of the market? Only time will tell.
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.