Stock Analysis

Accenture (NYSE:ACN) Is Increasing Its Dividend To $1.12

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NYSE:ACN
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Accenture plc (NYSE:ACN) will increase its dividend from last year's comparable payment on the 15th of November to $1.12. Based on this payment, the dividend yield for the company will be 1.7%, which is fairly typical for the industry.

Check out our latest analysis for Accenture

Accenture's Earnings Easily Cover The Distributions

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important. However, Accenture's earnings easily cover the dividend. This means that most of its earnings are being retained to grow the business.

The next year is set to see EPS grow by 28.5%. Assuming the dividend continues along recent trends, we think the payout ratio could be 31% by next year, which is in a pretty sustainable range.

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NYSE:ACN Historic Dividend October 4th 2022

Accenture Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. The annual payment during the last 10 years was $1.35 in 2012, and the most recent fiscal year payment was $4.48. This implies that the company grew its distributions at a yearly rate of about 13% over that duration. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. Accenture has impressed us by growing EPS at 14% per year over the past five years. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

Accenture Looks Like A Great Dividend Stock

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. Distributions are quite easily covered by earnings, which are also being converted to cash flows. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 22 analysts we track are forecasting for Accenture for free with public analyst estimates for the company. Is Accenture not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

What are the risks and opportunities for Accenture?

Accenture plc, a professional services company, provides strategy and consulting, interactive, industry X, song, and technology and operation services worldwide.

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Rewards

  • Price-To-Earnings ratio (24.5x) is below the IT industry average (28.3x)

  • Earnings are forecast to grow 7.75% per year

  • Earnings have grown 12.9% per year over the past 5 years

Risks

  • Significant insider selling over the past 3 months

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