© Reuters.
The Greenbrier (NYSE:) Companies, Inc. (NYSE:GBX) announced that it will increase its dividend to $0.30 on November 29, surpassing the payout ratio of most industry competitors. This increase brings the annual payout to 2.9% of the share price, a significant jump from last year’s equivalent payout. According to InvestingPro Data, the company’s dividend yield from 2023 stands at 2.93%, with dividend growth of 11.11% in the last twelve months.
Greenbrier’s earnings per share (EPS) are expected to grow 35.9% next year, which could lead to a sustainable payout ratio of 49%. According to InvestingPro Tips, the company’s net income is expected to grow this year and analysts are predicting sales growth in the current year. This could potentially strengthen the company’s financial position and support the increased dividend payout.
The company’s short dividend payment history, spanning just nine years with an annual growth rate of 8.0%, raises questions about the sustainability of its dividends over a full economic cycle. However, it’s worth noting that Greenbrier has managed to maintain a consistent dividend payout so far, despite its significant debt load and rapid cash burn, according to InvestingPro Tips.
These concerns are compounded by Greenbrier’s declining profits over the past five years. The company’s EPS has seen a 17% year-over-year decline, which could pose a threat to future dividends if this downward trend continues. However, the company’s earnings per share for the trailing twelve months stands at $1.79, according to InvestingPro Data, and four analysts have revised their earnings upwards for the coming period, according to InvestingPro Tips.
These factors together have led investors to question Greenbrier’s suitability as an income stock, despite its upcoming dividend increase and projected EPS growth. The company’s current market capitalization is $1.27 billion and it is trading at a P/E ratio of 22.91, which is relatively high compared to its near-term earnings growth. This, along with the company’s volatile share price movements, according to InvestingPro Tips, may add to investor concerns.
For more in-depth analysis and advice on Greenbrier and other companies, consider exploring InvestingPro, which offers 16 additional tips and detailed real-time metrics to make informed investment decisions.
This article was generated with the support of ai and reviewed by an editor. For more information consult our T&C.
