Avient Corporation (NYSE: AVNT) announced a 4% dividend hike to $0.2575 per share on Tuesday, pushing its annual dividend yield to 3%, a performance that exceeds most industry benchmarks. According to InvestingPro data, the company's market cap stands at a robust 3010M USD, and it has maintained a dividend payout ratio below 75% of its free cash flow, thus allowing for business reinvestment.
The company's dividends have shown remarkable stability over the past decade, with a compound annual growth rate (CAGR) of about 15%. The annual payment rose from $0.24 in 2013 to $0.99 in the latest fiscal year. Avient's earnings per share (EPS) have been on a downward trend, declining by approximately 3.1% annually over the past five years. This trend raises concerns about possible reductions in future dividends, despite the anticipated growth in earnings next year, as per InvestingPro Tips.
Even though this dividend increase is a positive sign for investors, Avient's payments are not guaranteed. The company's inconsistent profitability and declining EPS may not position it as a top-tier income providing stock. InvestingPro data reveals that the company's P/E Ratio is 5.23, and the revenue growth for LTM2023.Q2 is at -3.65%, which could potentially impact future dividends.
The firm is also forecasting a significant increase in earnings per share in the coming year. This prediction aligns with InvestingPro Tips, which indicate that the net income is expected to grow this year. Avient has a history of maintaining dividend payments, having done so for 13 consecutive years. Yet, if the current downward trend in earnings persists, there could be potential reductions in future dividends. This situation could lead to an escalated payout ratio, which could reach an alarming 826% if current trends persist.
For those interested in further tips and insights, InvestingPro offers additional tips as part of their premium service. For example, the service includes information about stock price volatility, analyst predictions, and more. To access these tips, visit InvestingPro.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.