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Axfood AB ( AXFOY ) Gears Up for Its Next Dividend Payment
Axfood AB ( AXFOY ) recently announced a total dividend of $0.47 per share, with the ex-dividend date set for 2026-09-18. This payment consists of $0.47 per share in cash dividends, payable on 2026-10-13. For investors, the ex-dividend date is a critical marker: shareholders must own the stock before this date to qualify for the payout, while the paydate indicates when the cash actually lands in accounts. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using data from GuruFocus, let's look into Axfood AB's dividend performance and assess its sustainability.
What Does Axfood AB Do?
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Axfood AB operates food retail and wholesale businesses in Sweden. The company runs various food retail grocery chains, discount stores, hypermarkets, restaurants, cafes, and pharmacies through different brands. Its operating segments include Willys, Hemkop, Dagab, City Gross, and Snabbgross. A majority of revenue is generated from the Willys segment, a discount grocery chain offering various products in both group-owned stores and online. This segment also includes the partly owned cross-border grocery chain Eurocash. For value investors, this diversified footprint across discount and premium formats provides exposure to a defensive, consumer-staples business with relatively stable demand across economic cycles.
A Glimpse at Axfood AB's Dividend History
Axfood AB has maintained a consistent dividend payment record since 2009, a track record spanning more than 15 years. Dividends are currently distributed on a bi-annual basis, meaning shareholders receive two payments per year rather than a single annual distribution. This cadence can be attractive for income-focused investors who prefer more frequent cash flows. Below is a chart showing annual Dividends Per Share, which tracks historical trends and helps investors gauge how management has prioritized returning capital over time.
Breaking Down Axfood AB's Dividend Yield and Growth
As of today, Axfood AB currently has a 12-month trailing dividend yield of 3.73% and a 12-month forward dividend yield of 3.83%. The trailing yield reflects dividends actually paid over the past year, while the forward yield is based on expected future payments. The gap between the two suggests an expectation of increased dividend payments over the next 12 months, a modest but meaningful signal for income investors comparing Axfood AB against peers in the consumer staples space.
Over the past three years, Axfood AB's annual dividend growth rate was 4.30%. Extended to a five-year horizon, this rate decreased to 4.20% per year. Over the past decade, Axfood AB's annual dividends per share growth rate stands at 6.60%. This pattern, faster growth over ten years than over the most recent five, indicates a gradual moderation in dividend increases, a trend worth monitoring for those relying on the payout for income.
Based on Axfood AB's dividend yield and five-year growth rate, the 5-year yield on cost of Axfood AB stock as of today is approximately 4.58%. Yield on cost measures the annual dividend return relative to an investor's original purchase price, assuming reinvestment and growth, and illustrates how a steadily rising payout can compound returns for long-term holders.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2026-06-30, Axfood AB's dividend payout ratio is 0.79. And this may suggest that the company's dividend may not be sustainable, since nearly four-fifths of earnings are being paid out rather than retained.
Axfood AB's profitability rank offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Axfood AB's profitability 9 out of 10 as of 2026-06-30, suggesting good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability. This combination of a high payout ratio and strong profitability presents a nuanced picture: earnings cover the dividend, but the margin for error is thinner than for companies retaining more capital.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Axfood AB's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors. A high growth rank implies expanding revenues and earnings, which can support future dividend increases even when the current payout ratio runs high.
Revenue is the lifeblood of any company, and Axfood AB's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Axfood AB's revenue has increased by approximately 6.20% per year on average, a rate that outperforms approximately 56.23% of global competitors. Steady top-line expansion in a defensive industry supports the case that the dividend can be maintained and potentially grown.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Axfood AB's earnings increased by approximately -0.60% per year on average, a rate that outperforms approximately 33.85% of global competitors. The slight decline in earnings per share, despite revenue growth, highlights pressure on margins and explains why the payout ratio has climbed.
Lastly, the company's 5-year EBITDA growth rate of 2.50% outperforms approximately 39.27% of global competitors. EBITDA, or earnings before interest, taxes, depreciation, and amortization, is a rough measure of operating cash flow. Moderate growth here suggests the company generates stable cash to fund payouts, though not at a pace that would comfortably support aggressive dividend increases.
Next Steps for Dividend Investors
Axfood AB's upcoming $0.47 per share dividend, payable on 2026-10-13 to shareholders of record before the 2026-09-18 ex-dividend date, continues a payout record stretching back to 2009. The stock offers a trailing yield of 3.73% and a forward yield of 3.83%, with a 5-year yield on cost near 4.58%. However, a payout ratio of 0.79 and slightly negative three-year EPS growth warrant caution. Strong profitability and growth ranks of 9 out of 10, plus 6.20% annual revenue growth, provide offsetting support. Value investors should weigh this balance of reliable income against limited earnings expansion before deciding whether Axfood AB deserves a place in their income portfolio.
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