Last update on 2024-06-27

Atrion (ATRI) - Dividend Analysis (Final Score: 6/8)

Atrion (ATRI) scores 6/8 in dividend analysis, showcasing strong dividend performance and stability based on an 8-criteria scoring system. Learn more!

Short Analysis - Dividend Score: 6

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

The dividend analysis for Atrion (ATRI) evaluates the company's performance and stability using an 8-criteria scoring system, with Atrion earning a score of 6. Atrion boasts a strong dividend yield significantly higher than the industry average, stable dividend payments over the past 20 years, conservative payout ratio, and consistent stock repurchases. However, the analysis highlights concerns like extreme fluctuations in the dividend growth rate and recent negative dividend coverage by cash flow, signaling potential challenges in sustaining its dividend policy.

Insights for Value Investors Seeking Stable Income

Considering the strengths in dividend yield, stability, stock repurchase consistency, and conservative payout ratio, Atrion shows positive traits for income-seeking investors. However, erratic growth rates and recent cash flow issues signal caution. Investors should investigate recent financial conditions further before making a decision. Monitoring future earnings and cash flow reports will be crucial in choosing whether to invest in Atrion.

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?

Dividend yield is the ratio of a company's annual dividend compared to its share price. It indicates how much dividend income investors can expect from their investment.

Atrion (ATRI) boasts a dividend yield of 2.2968%, which is significantly higher than the industry average of 0.67%. Over the past 20 years, ATRI's dividend yield has fluctuated but has been consistently strong compared to the industry. In some years, like 2010 and 2012, ATRI reported extraordinarily high yields of 5.88% and 6.17%, respectively. However, a yield much higher than industry levels might also suggest underappreciation in stock price or a strong commitment to returning value to shareholders. Over the recent decade, ATRI has displayed a general upward trend in dividend yield, culminating in the current rate. This reflects positively on shareholder returns and demonstrates financial robustness, hence good overall.

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

Dividend growth rate indicates how much dividend payouts increase over time. A high growth rate usually signals a company’s strong financial health and profitability.

Atrion (ATRI) has shown a highly volatile dividend growth rate over the past 20 years. There are severe fluctuations with some years witnessing enormous spikes, such as a 700% increase in 2010, followed by years with drastic decreases, like -82.7652% in 2011 and -80.1653% in 2013. The average growth rate stands at 69.48%, far exceeding the 5% benchmark, which in theory is highly positive. However, the inconsistency in year-over-year growth indicates instability and unpredictability in earnings growth. Investors may see the high-average growth as a strong signal, but the erratic fluctuations should be a cautionary flag when evaluating dividend reliance.

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

Explain the criterion for Atrion (ATRI) and why it is important to consider

The average payout ratio for the last 20 years is 32.25%, which is considerably lower than the 65% threshold. While the payout ratio did exceed 100% in certain years, these appear to be anomalies. Overall, this trend indicates that Atrion is very conservative in its dividend payouts, retaining a large portion of its earnings.

Dividends Well Covered by Earnings?

Earnings per share (EPS) measures the portion of a company's profit allocated to each outstanding share of common stock, serving as an indicator of the company's profitability.

Atrion (ATRI) has shown a consistent upward trend in its EPS from 2003 to 2021, peaking at $19.7054 in 2017 before experiencing a drop to $11.0227 in 2023. Despite this recent decline, the company's long-term EPS performance remains strong, indicating its capability to generate substantial profits over time. However, the significant drop in 2023 signals potential challenges or market conditions impacting profitability. Stakeholders should keep an eye on future earnings reports to determine if this decline is an anomaly or indicative of a longer-term issue.

Dividends Well Covered by Cash Flow?

Dividends well covered by cash flow ensure the sustainability of dividend payments, important for long-term investors.

Atrion's dividend coverage ratio has fluctuated significantly over the years. A ratio above 1 indicates dividends are well-covered by the free cash flow. However, Atrion has repeatedly experienced negative ratios in recent years, with particularly alarming figures of -2.95 in 2022 and -6.61 in 2023. These negative figures imply that the company's free cash flow was insufficient to cover the dividends, forcing the company possibly to resort to debt or other means to meet its payout obligations. On a positive note, prior periods showed healthier coverage ratios. For instance, 2020 had a ratio of 0.70, indicating some fiscal stability. Nevertheless, the recent drastic decline is troubling and may imply that the current dividend policy is unsustainable unless the free cash flow generation improves significantly.

Stable Dividends Since the Company Began Paying Dividends?

Stability in dividend payments demonstrates a company's reliability in returning profits to its shareholders. Any significant drops signal potential financial instability.

Over the past 20 years, Atrion (ATRI) has not seen its dividends per share (DPS) drop by more than 20% in any single year. In fact, the DSP has shown a consistent upward trend. Starting at $0.24 in 2003, the DPS has increased to $8.7 by 2023. The consistent growth indicates strong financial health and a commitment to returning profits to shareholders. This is highly favorable for income-seeking investors as it exhibits ATRI's ability to sustain and grow its dividend payouts year-over-year without volatility. The positive trend reinforces the company's solid position in maintaining and potentially improving dividend payouts.

Dividends Paid for Over 25 Years?

Explain the criterion for Atrion (ATRI) and why it is important to consider

Dividends Paid for Over 25 Years is a criterion assessing the company's commitment to returning value to shareholders consistently. It indicates financial health, investor confidence, and long-term stability.

Reliable Stock Repurchases Over the Past 20 Years?

share buybacks

Over the past 20 years, Atrion has exhibited a consistent and reliable trend of stock repurchases, particularly noted during the years 2012-2016 and 2019-2023. This indicates a strategic effort to enhance shareholder value and indicates robust financial health, potentially resulting in higher earnings per share (EPS) and improved return on equity (ROE). Specifically, Atrion reduced its number of shares from 1,839,000 in 2003 to 1,761,000 by 2023, representing an average annual share repurchase rate of -0.2007%. This long-term downward trend exemplifies a shareholder-friendly approach, positively impacting long-term investors.