Assessing Intercorp Financial Services Inc's dividend sustainability
Intercorp Financial Services Inc (NYSE:IFS) recently announced a dividend of $1.00 per share, payable on April 29, 2024, with an ex-dividend date of April 17, 2024. The company's dividend history, yield, and growth rate are also in focus as investors look forward to future payouts. Let's examine Intercorp Financial Services Inc's dividend performance and assess its sustainability using data from GuruFocus.
What does Intercorp Financial Services Inc do?
Intercorp Financial Services Inc, a company that provides financial services through banking, insurance and wealth management, recently strengthened its payments ecosystem by integrating Izipay. The company has four business segments. The banking sector primarily includes loans, lines of credit, deposits, and current accounts, the insurance sector offers single-premium life annuity products, traditional life insurance products, and other personal insurance products, and the wealth management sector includes intermediary services. and investment management services, and the payments division provides credit and debit card management services, operations and processing. Its geographic segments include Peru and Panama.
A glimpse of Intercorp Financial Services Inc's dividend history
Intercorp Financial Services Inc has maintained a consistent dividend payment record since 2020. Dividends are currently distributed on an annual basis. Below is a graph showing annual dividends per share to track historical trends.
Analyze Intercorp Financial Services Inc's dividend yield and growth rate
As of today, Intercorp Financial Services Inc's trailing 12-month dividend yield is 5.28% and its trailing 12-month dividend yield is 4.54%. This suggests that we can expect dividend payments to decline over the next 12 months.
Over the past 3 years, Intercorp Financial Services Inc's annual dividend growth rate was -9.60%. When extended to a five-year period, this rate increased to 1.00% per year.
Based on Intercorp Financial Services Inc's dividend yield and 5-year growth rate, Intercorp Financial Services Inc stock has a 5-year cost yield of approximately 5.55% as of today.
Questions about sustainability: Dividend payout ratio and profitability
To assess dividend sustainability, you need to evaluate a company's payout ratio. Dividend payout ratio helps determine the proportion of a company's profits that it distributes as dividends. A low ratio indicates that the company is retaining a significant portion of its earnings, thereby ensuring that it has funds for future growth or unexpected economic downturns. As of December 31, 2023, Intercorp Financial Services Inc's dividend payout ratio is 0.49.
Intercorp Financial Services Inc's Profitability Rank helps you understand the company's earning power compared to its peers. GuruFocus ranks Intercorp Financial Services Inc's profitability at 6 out of 10 as of December 31, 2023, suggesting fair profitability. The company has reported positive net income every year for the past 10 years, further cementing its high profitability.
Growth indicators: future outlook
To ensure dividend sustainability, companies must have solid growth metrics. Intercorp Financial Services Inc's Growth Rank of 6 out of 10 suggests that the company has decent growth prospects.
Earnings are the lifeblood of any company, and Intercorp Financial Services Inc's earnings per share combined with its 3-year earnings growth rate suggest a strong earnings model. Intercorp Financial Services Inc's earnings have grown at an average annual rate of about 4.80%. Performance below approximately 59.7% of global competitors.
The company's three-year EPS growth rate indicates its ability to grow earnings, which is a key factor in maintaining a dividend over the long term. Over the past three years, Intercorp Financial Services Inc's revenue has grown by an average of about 34.90% per year. Performance below approximately 18.95% of global competitors.
Finally, the company’s 5-year EBITDA Growth rate is 4.70%. Performance below approximately 60.68% of global competitors.
next step
In conclusion, Intercorp Financial Services Inc's dividend payments have been consistent, but the company's dividend growth rate and payout ratio indicate a cautious approach to dividend distribution. Fair profitability and growth indicators suggest a balanced outlook for sustainability. When value investors consider Intercorp Financial Services' future prospects, they need to weigh the company's ability to maintain its dividend in the face of industry trends, regulatory factors, and strategic initiatives. Will Intercorp Financial Services Inc continue to provide a reliable source of income for its shareholders? This remains a question worth considering when looking at the company's performance in the dynamic financial services space.
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This article created by GuruFocus is intended to provide general insight and is not intended as financial advice. Our commentary is based on historical data and analyst forecasts using an unbiased methodology and is not intended to serve as specific investment guidance. It does not constitute a recommendation to buy or sell stocks, and does not take into account your individual investment objectives or financial situation. Our objective is to provide fundamental data-driven analysis over time. Please note that our analysis may not incorporate the latest announcements or qualitative information from price-sensitive companies. GuruFocus has no position in the stocks mentioned herein.
This article first appeared on GuruFocus.