dividend growth rate, page-14

First 14 Last

Share
Profile

Follow
PigsMightFly

7,705 Posts.

2797

22/11/23

16:57

Post #: 71049122
Share

Originally posted by YellowSun: ↑

I was intrigued by the discussion on the growth rate of CSL dividends, so I got the data all the way back to 1994 (data from Intelligent Investor). The chart tells the story:

Red dots are the CSL dividends in AUD per financial year. The blue dotted line is the exponential best fit, with the equation displayed. If you know your mathematics (OK, I happen to have a PhD in applied mathematics!), you'll calculate that the trend growth rate is 13.5% per year since 1994. A couple of points that struck me - the great performance in the lead up to the financial crisis in 2008, and what appears to be the effect of Covid 19 in recent years. Overall, I think everyone would agree that the long-term performance is hugely impressive!

By the way, all dividends up to 2004 FY were fully franked. Since then, there has been almost no franking.

So, the big question - can they sustain this effort, at least for a few more years?

Expand

The 'great performance' was mostly due to almost free money being used to make expensive acquisitions. It is straight from Growth Stock Investing 101. The process is not sustainable and backfires spectacularly when high interest rates and high debt levels eventually catch up. That's why the CSL share price is falling ~15% pa in real terms.

No sane person would buy a company with a p/e of 37 when they can get 5% risk-free from bonds or term deposits.

Last edited by PigsMightFly: 22/11/23

CSL Price at posting: $259.24 Sentiment: Hold Disclosure: Not Held
Upvote

0 Great analysis

Reply