Explore Cognizant's Dividend Sustainability and Growth
Cognizant Technology Solutions Corporation (NASDAQ:CTSH) recently announced a dividend of $0.3 per share, payable on May 29, 2024, with an ex-dividend date of May 17, 2024. The company's dividend history, yield, and growth rate are also in focus as investors look forward to future payouts. Let's take a closer look at Cognizant Technology Solutions Corp's dividend history and assess its sustainability using data from GuruFocus.
What does Cognizant Technology Solutions Corp do?
Cognizant is a global IT services provider providing consulting and outsourcing services to the world's largest companies in a variety of industries including financial services, media and communications, healthcare, natural resources, and consumer products. . With approximately 300,000 employees worldwide, approximately 70% of which are based in India, Cognizant is headquartered in Teaneck, New Jersey.
A glimpse of Cognizant Technology Solutions Corp's dividend history
Cognizant Technology Solutions Corp has maintained a consistent dividend payment record since 2017, distributing dividends on a quarterly basis.
Analyzing Cognizant Technology Solutions Corp's dividend yield and growth
As of today, Cognizant Technology Solutions Corp's trailing 12-month dividend yield is 1.65% and its trailing 12-month dividend yield is 1.69%, indicating that its dividend payments are expected to increase over the next 12 months.
Over the past three years, Cognizant's annual dividend growth rate was 9.60%. Expanding to a five-year period, this rate decreased to 8.50% per year. Based on Cognizant's dividend yield and five-year growth rate, his five-year cost yield on Cognizant stock as of today is approximately 2.48%.
Questions about sustainability: Dividend payout ratio and profitability
To assess dividend sustainability, you need to evaluate a company's payout ratio. The dividend payout ratio of 0.26 as of March 31, 2024 indicates that the company retains a significant portion of its earnings, thereby ensuring the availability of funds for future growth or unexpected downturns. Suggests. Cognizant's profitability rank is 9 out of 10, and its consistently positive net income for the past 10 years confirms its strong profitability.
Growth indicators: future outlook
Cognizant Technology Solutions Corp's Growth Rank is 9 out of 10, indicating an encouraging growth trajectory. However, although sales and profit growth rates are strong, they are not at a superior level compared to global competitors. This translates to a three-year revenue growth rate of approximately 7.60% and a three-year EPS growth rate of approximately 10.00% per year. Moreover, his EBITDA growth rate for the company's five years is 1.30%.
Considering Cognizant Technology Solutions Corp's stable dividend payments, moderate growth in payout ratio, prudent payout ratio, and solid profitability, the dividend appears to be sustainable. However, investors should always keep an eye on growth metrics to ensure long-term sustainability. GuruFocus Premium users can explore other high dividend yield opportunities using the High Dividend Yield Screener.
This article written 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 utilizing an unbiased methodology and is not intended to serve as specific investment guidance. It is not a recommendation to buy or sell stocks, and does not take into account individual investment objectives or financial situation. Our objective is to provide fundamental data-driven analysis over the long term. Please note that our analysis may not incorporate the latest announcements or qualitative information from price-sensitive companies. GuruFocus has no position in any stocks mentioned herein.
This article first appeared on GuruFocus.
