Schneider Electric SE’s Dividend Analysis

June 08 09:16 2024

Schneider Electric SE (SBGSY) recently announced a dividend of $0.75 per share, payable on 2024-06-20, with the ex-dividend date set for 2024-05-29. 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 Schneider Electric SE’s dividend performance and assess its sustainability.

Schneider Electric is a leading global supplier of electrical and industrial automation equipment. The group has four end markets: buildings, data centers, infrastructure, and industry, each of which, relies on Schneider’s products and solutions to ensure their operations run safely and efficiently. Schneider sells its products via distributors (45% of revenue), direct to customers (40% of revenue), and the remainder through other channels such as panel builders or system integrators. The group’s largest geographic markets are the US, China, and India.

A Glimpse at Schneider Electric SE’s Dividend History

Schneider Electric SE has maintained a consistent dividend payment record since 2009. Dividends are currently distributed on a yearly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.

Breaking Down Schneider Electric SE’s Dividend Yield and Growth

As of today, Schneider Electric SE currently has a 12-month trailing dividend yield of 1.33% and a 12-month forward dividend yield of 1.46%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Schneider Electric SE’s annual dividend growth rate was 7.30%. Extended to a five-year horizon, this rate decreased to 7.20% per year. And over the past decade, Schneider Electric SE’s annual dividends per share growth rate stands at 9.10%.

Based on Schneider Electric SE’s dividend yield and five-year growth rate, the 5-year yield on cost of Schneider Electric SE stock as of today is approximately 1.88%.

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, Schneider Electric SE’s dividend payout ratio is 0.45.

Schneider Electric SE’s profitability rank, offers an understanding of the company’s earnings prowess relative to its peers. GuruFocus ranks Schneider Electric SE’s profitability 8 out of 10 as of 2023-12-31, 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. Schneider Electric SE’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 Schneider Electric SE’s revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Schneider Electric SE’s revenue has increased by approximately 12.00% per year on average, a rate that outperforms approximately 62.68% 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, Schneider Electric SE’s earnings increased by approximately 16.10% per year on average, a rate that outperforms approximately 55.36% of global competitors.

Lastly, the company’s 5-year EBITDA growth rate of 10.00%, which outperforms approximately 54.16% of global competitors.

Conclusion

Considering Schneider Electric SE’s consistent dividend payments, robust growth metrics, and a healthy payout ratio, the company appears well-positioned to continue its tradition of rewarding shareholders with sustainable dividends. Investors seeking to diversify their portfolio with a stock offering steady dividend returns might find Schneider Electric SE an attractive option.

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