Latest news with #AfricanRainbowMineralsLimited
Yahoo
29-03-2025
- Business
- Yahoo
African Rainbow Minerals' (JSE:ARI) Dividend Is Being Reduced To ZAR4.50
The board of African Rainbow Minerals Limited (JSE:ARI) has announced it will be reducing its dividend by 25% from last year's payment of ZAR6.00 on the 7th of April, with shareholders receiving ZAR4.50. The dividend yield of 9.9% is still a nice boost to shareholder returns, despite the cut. The end of cancer? These 15 emerging AI stocks are developing tech that will allow early identification of life changing diseases like cancer and Alzheimer's. We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. At the time of the last dividend payment, African Rainbow Minerals was paying out a very large proportion of what it was earning and 281% of cash flows. This is certainly a risk factor, as reduced cash flows could force the company to pay a lower dividend. Over the next year, EPS is forecast to expand by 12.3%. If recent patterns in the dividend continues, the payout ratio in 12 months could be 82% which is a bit high but can definitely be sustainable. View our latest analysis for African Rainbow Minerals The company has a long dividend track record, but it doesn't look great with cuts in the past. The dividend has gone from an annual total of ZAR6.00 in 2015 to the most recent total annual payment of ZAR15.00. This works out to be a compound annual growth rate (CAGR) of approximately 9.6% a year over that time. We have seen cuts in the past, so while the growth looks promising we would be a little bit cautious about its track record. Given that the dividend has been cut in the past, we need to check if earnings are growing and if that might lead to stronger dividends in the future. Over the past five years, it looks as though African Rainbow Minerals' EPS has declined at around 5.6% a year. If earnings continue declining, the company may have to make the difficult choice of reducing the dividend or even stopping it completely - the opposite of dividend growth. It's not all bad news though, as the earnings are predicted to rise over the next 12 months - we would just be a bit cautious until this can turn into a longer term trend. In summary, dividends being cut isn't ideal, however it can bring the payment into a more sustainable range. The payments are bit high to be considered sustainable, and the track record isn't the best. We don't think African Rainbow Minerals is a great stock to add to your portfolio if income is your focus. Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've picked out 1 warning sign for African Rainbow Minerals that investors should know about before committing capital to this stock. Is African Rainbow Minerals not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Yahoo
30-01-2025
- Business
- Yahoo
The past three years for African Rainbow Minerals (JSE:ARI) investors has not been profitable
In order to justify the effort of selecting individual stocks, it's worth striving to beat the returns from a market index fund. But if you try your hand at stock picking, you risk returning less than the market. We regret to report that long term African Rainbow Minerals Limited (JSE:ARI) shareholders have had that experience, with the share price dropping 33% in three years, versus a market return of about 18%. Furthermore, it's down 12% in about a quarter. That's not much fun for holders. So let's have a look and see if the longer term performance of the company has been in line with the underlying business' progress. View our latest analysis for African Rainbow Minerals There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price. During the three years that the share price fell, African Rainbow Minerals' earnings per share (EPS) dropped by 37% each year. In comparison the 12% compound annual share price decline isn't as bad as the EPS drop-off. So the market may not be too worried about the EPS figure, at the moment -- or it may have previously priced some of the drop in. You can see how EPS has changed over time in the image below (click on the chart to see the exact values). This free interactive report on African Rainbow Minerals' earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further. When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of African Rainbow Minerals, it has a TSR of -5.7% for the last 3 years. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments! African Rainbow Minerals shareholders are down 8.5% for the year (even including dividends), but the market itself is up 17%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. On the bright side, long term shareholders have made money, with a gain of 10% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand African Rainbow Minerals better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with African Rainbow Minerals (including 1 which is a bit concerning) . Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on South African exchanges. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
