Last update on 2024-06-27

Aixtron (AIXA.DE) - Dividend Analysis (Final Score: 6/8)

Comprehensive dividend analysis of Aixtron (AIXA.DE), evaluating performance and stability using an 8-criteria scoring system. Final Score: 6/8.

Short Analysis - Dividend Score: 6

We're running Aixtron (AIXA.DE) against the 8-criteria scoring system to evaluate the performance and stability of a company's dividend policy.

The dividend analysis for Aixtron (AIXA.DE) evaluates its performance in several key areas. It shows a volatile dividend yield historically higher than the industry average but with periods of no payouts. The average annual growth rate hasn't surpassed 5% regularly over the past 20 years, hinting at an unstable dividend strategy. Although recent trends exhibit better earnings to dividends coverage, historical inconsistencies remain notable. Furthermore, the dividend coverage by cash flow fluctuates significantly, indicating varied operational performance. The company hasn't paid stable dividends consistently and lacks a 25-year uninterrupted dividend history. Its stock repurchasing activities are also sporadic, reflecting inconsistent capital management strategies.

Insights for Value Investors Seeking Stable Income

If you're an investor prioritizing stable and consistent dividend income, Aixtron (AIXA.DE) might not be the best choice due to its historical volatility and sporadic dividend payouts. However, recent trends suggest a potential shift towards greater stability and improved financial health, which could be promising. It would be wise to monitor Aixtron’s upcoming financial performance to see if this positive trend continues before making any investment decisions.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Dividend Yield Higher than the Industry Average?

The criterion to consider here is the dividend yield of a stock. Dividend yield is calculated as the annual dividend payment divided by the stock's price. It indicates how much cash flow you're getting for each dollar invested. This metric is crucial for income-focused investors as it helps them find stocks that provide a good return on the dividends they receive.

Aixtron's current dividend yield of 1.6037% is significantly higher than the industry average of 0.34%. Historically, Aixtron’s dividend yield has been volatile, with notable peaks like the 6.0914% in 2011. However, the dividend yield remained at 0% for several years, indicating no dividend payouts during those years. Compared to the industry, Aixtron's yield has often outperformed, especially in recent years. The higher yield this year is a good sign as it suggests Aixtron is returning more capital to shareholders relative to its stock price. Over 20 years, the general trend shows that Aixtron seems committed to returning value to shareholders, but caution is advised given the historical volatility.

Average annual Growth Rate higher than 5% in the last 20 years?

The Dividend Growth Rate measures the annualized percentage rate of growth that a particular stock's dividend undergoes over a period of time.

Aixtron's (AIXA.DE) dividend data over the last 20 years reveals that there were numerous years with zero dividend growth or even negative growth rates. Notably, the dividend per share ratio was not consistently exceeded 5% growth annually. In many years, dividends either stagnated at 0% or registered negative trends, as evidenced by ratios like -55.5556, -100, and similar figures. The drastic figures such as 445.4545% in 2022 are outliers and cannot reliably represent a consistent growth trend. Consequently, we cannot confirm a sustained dividend growth rate higher than 5% over the past 20 years. Therefore, the dividend growth criterion is not met, indicating a relatively volatile dividend strategy. This irregularity could be due to fluctuating profit margins or inconsistent financial performance, which should be a cautionary signal for dividend-focused investors. The average dividend ratio significantly tilted by few high outliers does not truly reflect a consistent growth pattern.

Average annual Payout Ratio lower than 65% in the last 20 years?

Explain the criterion for Aixtron (AIXA.DE) and why it is important to consider

The average payout ratio is a key metric in assessing the sustainability and reliability of a company's dividend payout. A payout ratio below 65% generally indicates that the company is retaining enough of its earnings to invest in growth and manage any financial challenges, while still providing a dividend to shareholders.

Dividends Well Covered by Earnings?

Dividends covered by earnings per share indicate a company's ability to pay its dividends from its profits.

Reviewing Aixtron's dividend per share coverage by earnings per share over the past two decades reveals a mixed trend. In several years including 2003, 2005, and 2012-2014, dividends were not covered by earnings, often resulting in a negative ratio, this could indicate unsustainable dividend payouts in those years. However, in periods like 2009 and 2011, the dividends were exceptionally well covered, with ratios of 0.186 and 0.768 respectively, suggesting strong profits relative to dividend payments during those periods. Most importantly, recent trends from 2020 to 2022 show positive and improving coverage ratios, peaking at 0.671 in 2022. This positive trend suggests a current healthy financial situation where earnings satisfactorily cover dividends, a good indicator of the company’s financial stability. Overall, although there were years of concern, recent coverage ratios indicate a more sustainable dividend policy.

Dividends Well Covered by Cash Flow?

Dividends well covered by cash flow is an important measure of financial health as it indicates the company's ability to maintain or grow dividends without straining its liquidity position.

Covering dividends by free cash flow is a crucial indicator of Aixtron's operational efficiency and sustainability. It ensures that the company can continue paying dividends without resorting to external financing or compromising growth investments. In the given data, Aixtron's dividend coverage has been highly volatile. For instance, from 2009 to 2011, dividends were not well covered by cash flow, leading to noticeable negative figures of -1.66 in 2011 and -0.40 in 2012. Conversely, in years like 2008 and 2018, coverage ratios of 2.12 and 3.28 indicate solid financial footing allowing for dividend payments well-covered by cash flow. Particularly notable is the year 2022, with a coverage ratio of 4.50, suggesting exceptional cash flow generation relative to dividend payments. Adversely, 2023 sees a negative coverage of -0.32, indicating that Aixtron paid more dividends than it generated in free cash flow. The trend shows significant fluctuations, pointing towards inconsistency in operational performance or cash flow management challenges at Aixtron. It’s a mixed trend, with certain years depicting strong cash flow coverage and others indicating financial strain for dividend payments.

Stable Dividends Since the Company Began Paying Dividends?

Stability in dividend payments, where the dividend per share did not drop by more than 20% over the past two decades, is of utmost importance for income-seeking investors.

Examining Aixtron's dividend history over the past 20 years, we see a somewhat irregular pattern. Between 2003 and 2010, dividends were marginal or nonexistent, with the exceptions being 2003, 2008, 2009, and 2010 where dividends were respectively 0.08, 0.07, 0.09, and 0.15. In 2011, a significant spike occurred with a dividend of 0.6 but this was followed immediately by zero dividends from 2012 to 2020. Recently, however, there has been a positive turnaround, with a dividend of 0.11 in 2021 followed by an impressive 0.6 and 0.62 in 2022 and 2023 respectively. While the critical requirement of stability reflects that dividends should neither drop substantially nor remain erratic, Aixtron's dividends have seen erratic trends initially but have lately shown increasing stability. Because Aixtron hasn’t maintained stable dividends without extreme drops or non-payments for several periods, income-seeking investors might find this inconsistent. However, the positive trend in recent years could potentially signal a shift towards greater stability. This trend is good unless the significant historical variability is a dealbreaker for an investor purely focusing on consistent historical dividend income.

Dividends Paid for Over 25 Years?

Dividends paid for over 25 years demonstrate a company's commitment to returning value to shareholders and its financial stability.

Aixtron (AIXA.DE) has not consistently paid dividends for over 25 years. Analyzing the given data from 2000 to 2023, the company had various periods where no dividends were paid at all (from 2004 to 2008, and again from 2014 to 2020). Aixtron tends to pay dividends intermittently, linked perhaps to specific profitable years rather than a consistent dividend policy. This lack of consistency can be seen as a negative trend for dividend-focused investors, as it does not ensure regular income. Aixtron's intermittent dividend payment reflects the cyclical or project-based nature of its business, rather than long-term, stable dividend growth.

Reliable Stock Repurchases Over the Past 20 Years?

Stock repurchases, or buybacks, reduce the number of outstanding shares, often signaling confidence in a company's future. They're vital for EPS growth.

Aixtron (AIXA.DE) has had sporadic stock repurchases over the past 20 years. Notably, the years 2004, 2012, 2015, and 2023 saw significant repurchase activities, with an average repurchase rate of -4.1442%. This erratic pattern suggests a lack of consistent buyback strategy, which could be viewed negatively. Consistent buybacks usually signal sustained confidence and capital management. One positive note is the dramatic repurchase in 2023, potentially indicating renewed confidence in the company's valuation and financial health, assuming it continues.