Last update on 2024-06-27

Ackermans & Van Haaren (B3K.F) - Dividend Analysis (Final Score: 5/8)

Comprehensive dividend analysis of Ackermans & Van Haaren (B3K.F) with an 8-criteria scoring system, final score 5/8. Key insights into stability and performance.

Short Analysis - Dividend Score: 5

We're running Ackermans & Van Haaren (B3K.F) against the 8-criteria scoring system to evaluate the performance and stability of a company's dividend policy.

The analysis of Ackermans & Van Haaren (B3K.F) based on eight criteria gives the dividend a score of 5 out of 8. While its current dividend yield (1.9534%) is slightly below the industry average (2.27%), it has shown a positive upward trend over the last twenty years. The company's average annual dividend growth rate meets the 5% criterion conditionally, with notable growth in recent years but inconsistencies in the past. Its average payout ratio is very conservative at 14.77%, well below the 65% benchmark, indicating more earnings reinvested in the company. Dividend coverage by earnings and cash flow shows resilience but also variability, emphasizing the need for monitoring. The company has shown stability in increasing its dividends since 2010 but has not paid dividends for over 25 years, and there are signs of reliable stock repurchases, demonstrating commitment to shareholders.

Insights for Value Investors Seeking Stable Income

Ackermans & Van Haaren (B3K.F) shows promising signs for dividend-focused investors, especially those looking at long-term stability and growth. The dividend policy is conservative, focusing on sustained reinvestment and gradual increases. However, some historical inconsistencies in dividend payments and coverage by cash flow suggest a need for cautious optimism. Investors seeking stable and gradually growing dividends may find this stock appealing, but they should be aware of potential variability and monitor financial health indicators closely before making a decision.

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 represents the ratio of a company's annual dividend compared to its share price. It's crucial for income-focused investors as it provides insight into the return that dividend payments are generating relative to the stock price.

Ackermans & Van Haaren's current dividend yield is 1.9534%, slightly below the industry average of 2.27%. Over the last two decades, the company's dividend yield has fluctuated but generally risen, particularly in the last decade, reaching up from 0% in 2003 to nearly 2% in recent years. While a yield below the industry average might seem less attractive, the steady increase portrays a positive trend. Nevertheless, the lower yield could indicate that either the stock price is high relative to the dividend, or the company takes a conservative approach to dividends. This trend suggests resilience and gradual improvement, making it relatively good but slightly behind industry standards.

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

Examining the Dividend Growth Rate over the last 20 years provides insight into the company's ability to consistently increase its payouts to investors.

The Dividend Ratio values span from 2003 to 2023, and recent values have seen substantial increases, notably in 2019, 2021, 2022, and 2023. For instance, a jump from 1.2931 (2021) to 17.0213 (2022) represents a significant increase, and even though 2023 shows a dip to 12.7273, it still maintains a high level compared to previous years. These increments illustrate robust dividend growth alleviated by high peaks. However, there were elongated periods, particularly from 2003 to 2012 where dividends were negligible or absent, indicating inconsistency. On average, the Dividend Ratio of 3.457 does suggest moderate growth, although the average is skewed by sparse high points interspersed between low/zero ratios. Overall, the trend is positive with strong growth in recent years, supporting the 5%-criterion conditionably but highlighting initial inconsistency.

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

Average payout ratio is crucial as it indicates the portion of earnings a firm is distributing to shareholders, balancing reinvestment and reward.

Ackermans & Van Haaren (B3K.F) has maintained an average payout ratio of approximately 14.77% over the past 20 years, indicating a conservative approach in distributing earnings to shareholders. This is significantly below the benchmark of 65%, suggesting the company prioritizes retaining earnings for reinvestment, which is favorable for long-term growth and stability.

Dividends Well Covered by Earnings?

The coverage of dividends by earnings is an important measure of a company's financial health and sustainability. A higher coverage ratio indicates that the company generates sufficient earnings to cover its dividend payments, which can be a sign of stability and less likelihood of dividend cuts.

Looking at Ackermans & Van Haaren (B3K.F), the Earnings Per Share (EPS) and Dividend Per Share (DPS) over the years show a generally sufficient coverage of dividends by earnings. For instance, in the most recent year (2023), the EPS is 12.1315, and the DPS is 3.1, resulting in a coverage ratio of 0.255. While this ratio may seem low, it still indicates that earnings can cover dividends (though ideally, we look for ratios near or above 1.0 for more comfort). The significant increase in EPS around 2021 and 2022 (21.3916 in 2022 versus 12.2726 in 2021) provided very strong coverage with ratios over 1. However, the steadily increasing dividends over time coupled with variable earnings makes it critical to watch this ratio closely. Thus, while recent trends show decent coverage, any potential earnings decline could risk the sustainability of current dividend levels.

Dividends Well Covered by Cash Flow?

A company's dividends being well covered by cash flow is crucial as it indicates the sustainability of its dividend payouts. Firms with strong cash flow coverage ensure that dividends are paid from actual generated cash rather than borrowing or selling assets, which is a sign of financial health.

Analyzing the historical data of Ackermans & Van Haaren (B3K.F) from 2003 to 2023, we see a varying trend in the coverage of dividends by free cash flow. The ratio of cash flow to dividends has fluctuated significantly with several years showing negative coverage (e.g., -0.163 in 2005, -0.471 in 2010, -0.261 in 2012, -0.943 in 2018), indicating the dividends were paid out despite a shortfall in free cash flow. On the positive side, there are years with high cash flow coverage such as 1.192 in 2017, and 0.87 in 2019, suggesting robust cash generation. However, inconsistency in coverage raises concerns. For instance, in 2023, the coverage ratio stands at 0.472, demonstrating that nearly half of the dividend payout can be supported by free cash flow, a relatively stable but not entirely strong indicator. The substantial positive years offsetting the negatives show resilience but emphasizing caution in forecasting. Overall, while there are years where dividends have been well covered by cash flow, the erratic pattern signals the necessity of monitoring closely for sustainable dividend payouts. The trend showcases both resilience and potential fiscal strains, necessitating a balanced approach in evaluating future expectations.

Stable Dividends Since the Company Began Paying Dividends?

Explain the criterion for Ackermans & Van Haaren (B3K.F) and why it is important to consider

Dividend stability over two decades is a key indicator of a company's financial health and its commitment to returning value to shareholders. For income-seeking investors, the assurance that dividends will not experience significant drops is crucial for long-term financial planning. The provided dividend per share data for ACKB demonstrates an overall increasing trend from 2010 to 2023, with notable leaps in certain years.

Dividends Paid for Over 25 Years?

Dividends paid for over 25 years indicate a company's ability to generate consistent profitability and shareholder returns, reflecting stability and financial health.

Ackermans & Van Haaren (B3K.F) has consistently paid dividends since 2011, with the dividend per share increasing from 1.55 in 2011 to 3.1 in 2023. This indicates a steady growth in profitability and a strong commitment to rewarding shareholders. However, it's important to note that the dividends were not paid for the full 25-year period, suggesting that while the trend has been positive in recent years, the long-term consistency over a quarter of a century is not yet demonstrated. Nevertheless, the substantial increase in dividends per share over the last decade is a positive indicator of the company’s financial health.

Reliable Stock Repurchases Over the Past 20 Years?

Reliable Stock Repurchases Over the Past 20 Years

Assessing the trend in stock repurchases over the last 20 years for Ackermans & Van Haaren is vital as it can signify the company's commitment to returning value to shareholders. Consistent repurchases can indicate management's confidence in the firm's long-term prospects and can also serve to boost earnings per share (EPS) by reducing the number of shares outstanding. Such actions may be seen as a sign of financial health and stability, attracting more investors.