Our analysis is based on comparing San Miguel Corp. with the following peers – Japan Tobacco Inc., Thai Beverage Public Co., Ltd., C&C Group Plc and PepsiCo, Inc. (JAPAF-US, TBVPF-US, CGPZF-US and PEP-US).
San Miguel Corp.’s dividend yield is 0.86 percent and its dividend payout is 10.88 percent. This compares to a peer average dividend yield of 2.79 percent and a payout level of 60.70 percent. This relatively lagging dividend performance could spur some dividend action going forward – as long as the company’s relatively strong dividend quality score of 83 out of a possible score of 100 looks sustainable.
Dividend Quality Overview
- Over the last twelve months (prior to March 31, 2017), SMGBY-US paid a high quality dividend, which represents a yield of 0.87% at the current price.
- Dividend quality trend has not been consistent over the last five years. Dividends were paid during each of these years — of these 3 were high quality and 2 were low quality.
- The ending cash balance, with a dividend coverage of 23.20x, provides a substantial cushion in case of a significant reduction of cash flows in the future.
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Over the last twelve months (prior to March 31, 2017), SMGBY-US paid a high quality dividend.
The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 7.89x), investing cash flow (coverage of -3.18x), issuance cash flow (coverage of -3.87x) and twelve-month prior cash (coverage of 20.90x), for a total dividend coverage of 24.20x.
SMGBY-US’s issuance cash flow includes outflows from net debt repayment (coverage of -2.23x) and net share buybacks (coverage of -0.05x). Thus, the total coverage including share buybacks is 24.26x, which reflects our assumption that the cash paid for share buybacks is discretionary and could instead be used to pay dividends.
These coverage ratio factors imply that the firm’s dividends are wholly paid from operating and investing cash flows net of any debt repayments, which suggests a high dividend quality.
|Dividend Yield (%)||4.14||7.68||5.57||8.53||3.93||0.86|
|Dividend Payout (%)||11.47||21.63||26.04||37.54||23.61||10.88|
A complete list of metrics and analysis is available on the company page.
San Miguel Corp. manufactures and sells beverage, food and packaging products. The company operates its business through the following segments: Beverages, Food, Packaging, Energy, Fuel & Oil, and Infrastructure. The Beverages segment produces and markets alcoholic and non-alcoholic beverages. The Food segment includes feeds production; poultry and livestock farming; and processing and selling of poultry and meat products. This segment also manufactures and markets flour, flour mixes & bakery ingredients, butter, margarine, cheese, milk, ice cream, jelly snacks & desserts, specialty oils, salad aids, and snacks & condiments. The Packaging segment produces and markets packaging products, such as glass containers, glass molds, polyethylene terephthalate bottles, plastic closures, corrugated cartons, woven polypropylene, paperboard and pallets. This segment also manufactures and markets plastic crates, plastic floorings, plastic films, plastic trays, plastic pails & tubs, metal closures and two-piece aluminum cans, woven products, industrial laminates and radiant barriers. The Energy segment sells, retails and distributes power through power supply agreements, retail supply agreements, and concession agreements. The Fuel & Oil segment is engaged in refining and marketing of petroleum products. The Infrastructure segment engages in the business of construction and development of infrastructure projects, such as airports, roads, highways, toll roads, freeways, skyways, flyovers, viaducts and interchanges. The company was founded in 1890 and is headquartered in Mandaluyong, Philippines.
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