Last update on 2024-06-27

Basler (BSL.DE) - Dividend Analysis (Final Score: 5/8)

Discover Basler (BSL.DE)'s 5/8 Dividend Analysis Score. Explore performance, criteria, and stability. Invest wisely with detailed dividend insights.

Short Analysis - Dividend Score: 5

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

The analysis of Basler (BSL.DE) evaluates its dividend policy based on an 8-criteria scoring system. Basler scored 5 out of 8 points. Here are the key points: 1. **Dividend Yield**: Basler's current dividend yield of 2.4055% is higher than the industry average of 1.1%, indicating a better return on dividends. 2. **Dividend Growth Rate**: Over the past 20 years, Basler has an average annual dividend growth rate of 12.1277%. However, there have been periods of significant fluctuations and some instances of negative growth. 3. **Payout Ratio**: Basler has maintained an average payout ratio of 34.27% over the last 20 years, which falls well below the 65% threshold. However, there have been years with very high payout ratios. 4. **Dividend Coverage by Earnings**: There is variability in coverage ratio across the years, but many years show good to excellent coverage ratios, indicating the ability to pay dividends from earnings. 5. **Dividend Coverage by Cash Flow**: There is inconsistency in covering dividends with free cash flow, indicating volatility and a need for better cash flow management. 6. **Stability of Dividends**: There have been significant drops in dividend amounts over the past 20 years, with no consistent pattern of stability. 7. **Dividend History**: Basler has paid dividends for only 13 out of the past 21 years, which may be a weakness for those seeking long-term reliability in income. 8. **Stock Repurchases**: The criterion was explained for Basler, but no specific data was provided in the summary.

Insights for Value Investors Seeking Stable Income

Basler (BSL.DE) exhibits a mixed performance with both strengths and weaknesses in its dividend policy. The higher dividend yield and low payout ratio are positives for growth and financial flexibility. However, the inconsistency in dividend growth, coverage by cash flow, and historical stability may be concerns for more conservative investors. If you are willing to tolerate some risk for potentially higher rewards, Basler could be worth considering. However, for those seeking steady and reliable dividend income, it might not be the best choice.

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.

Basler's current dividend yield of 2.4055% surpasses the industry average of 1.1%, indicating a relatively higher return on dividends for shareholders. Historically, Basler's dividend yield has fluctuated significantly, peaking in 2011 at 6.6766%. Despite some fluctuations, the current yield demonstrates a positive trend compared to the industry, which, coupled with the broader rising average stock price values (11.64 in 2023 from around 3.6 in 2003), signals robust growth and confidence for investors. Notably, the more recent rise in both stock price and dividend payouts can be seen as a very favorable sign for both current and prospective investors.

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

The dividend growth rate examines the annualized percentage rate of growth that a stock's dividend yield undergoes over a specified period, here being 20 years. This metric is crucial for gauging the company's ability to incrementally improve shareholder returns through dividends over time.

Evaluating the dividend growth rate for Basler (BSL.DE) over a 20-year period, the provided data highlights significant fluctuations in the dividend per share ratio, with values ranging considerably from -72.3857% to 172.9863%. With a mean dividend ratio of 12.1277% over this period, it's apparent that despite periods of negative growth, the average suggests a moderate growing trend. A key point to note is that while there have been instances of substantial positive growth, the inconsistency and instances of negative values indicate volatility. On average, though the growth surpasses the 5% threshold, the volatility could be a concern for risk-averse investors. This mixed trend would likely be viewed as favorable for investors willing to tolerate higher risk for potentially higher rewards but may deter more conservative investors.

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

average payout ratio

Basler's average payout ratio over the last 20 years is 34.27%. Specifically, in the years 2003 to 2010 as well as 2023, they have maintained a payout ratio of 0%. The rest fluctuate significantly with a notably high payout ratio in 2015 (108.48%) and 2019 (118.19%). Despite these outliers, the averaged result falls well below the 65% threshold. This low average ratio generally indicates that the company is reinvesting most of its earnings back into the business rather than paying them out as dividends, which is typically viewed favorably as it allows for growth and financial flexibility. Overall, the low average payout ratio is positive for the company under the given criterion.

Dividends Well Covered by Earnings?

Dividends are well covered by the earnings refers to the ability of a company to pay its dividend from its net income. A high coverage ratio indicates that the company generates sufficient earnings to cover its shareholders' dividends, reducing the risk of dividend cuts in the future.

When analyzing Basler (BSL.DE) based on this criterion, it's evident that the coverage ratio shows variances across the years. For instance, in 2017, EPS was 2.2463 and the dividend per share was 0.2467, leading to a coverage ratio of approximately 9.1, indicating strong coverage. However, other years like 2019 show lower coverage (0.4315 in earnings vs. 0.51 dividends, resulting in a coverage ratio of 0.85). Despite some occasional dips below 1, overall, many years show good to excellent coverage ratios (>1), reflecting positively on Basler's ability to pay dividends from earnings.

Dividends Well Covered by Cash Flow?

Dividends Well Covered by Cash Flow addresses the company’s ability to sustain its dividend payments from the free cash flows it generates. This is crucial for dividend stability and reflects the company's overall financial health.

Assessing Basler's ability to cover its dividends with free cash flow from 2003 to 2023 in most years. For example, in 2012, the dividend coverage was 0.1621 and in 2014 it was 0.2104, indicating potential strain. Between 2015 to 2017, the coverage ranged from 0.6323 to 0.1168 suggesting variable ability to cover dividend. In years like 2019 (coverage: -0.5240) and 2021 (coverage: 0.6038), it shows inconsistency in cash flow sufficiency. This situation reflects volatility in free cash flow and a need for prudent cash flow management.

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.

Reviewing Basler's dividends over the past 20 years illustrates periods of significant change, with notable examples such as the decline from 0.7 euros in 2015 to 0.1933 euros in 2016, which is more than a 20% drop. However, analyzing short term, more recent years, one can observe that while there is some fluctuation, there is no regular pattern of significant drops greater than 20%. For instance, between 2020 and 2021, and 2021 and 2022, we notice declines such as 0.58 euros to 0.2067 euros from 2021 to 2022, more than a 20% drop. This fluctuation may concern income-seekers relying on stable dividend payout dependencies. It presents neither consistency nor reassurance for investors who prioritize income stability.

Dividends Paid for Over 25 Years?

Assesses the consistency and reliability of dividend payments over a long period (25 years).

Basler (BSL.DE) has a relatively short track record of dividend payments spanning only 13 years out of the given 21 years from 2003 to 2023. The company did not pay dividends from 2003 to 2010. Starting in 2011, the company introduced a dividend per share of € 0.3, with subsequent fluctuations over the years. There isn't a consistent 25-year history, which can indicate the company might not have a longstanding commitment to shareholder returns through dividends. This relatively short history may be considered a weakness for long-term income-focused investors who prefer companies with a long-standing and stable dividend payout record.

Reliable Stock Repurchases Over the Past 20 Years?

Explain the criterion for Basler (BSL.DE) and why it is important to consider

Reliable stock repurchases are often seen as a signal that a company is confident in its own prospects. When a company buys back its own shares, it can lead to an increase in earnings per share (EPS) and often signals that the company believes its stock is undervalued. Additionally, stock repurchases reduce the number of outstanding shares, which can make the remaining shares more valuable. They are essential for long-term investors looking to assess the company's commitment to returning value to shareholders.