Last update on 2024-06-27

Cresud SACIF y (CRESY) - Dividend Analysis (Final Score: 3/8)

Cresud SACIF y (CRESY) dividend analysis scores 3/8, highlighting performance and stability using an 8-criteria system. Dividend reliability and growth are scrutinized.

Short Analysis - Dividend Score: 3

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

The dividend analysis of Cresud SACIF y (CRESY) reveals a number of key points: 1. Dividend Yield Low: At 0.0043%, Cresud's dividend yield is much lower than the industry average of 2.55%. 2. Dividend Growth Rate: Cresud has shown significant variability with average annual growth around 9.58%, but inconsistent payouts mark a negative trend. 3. Low Payout Ratio: With a very low average payout ratio of 2.02%, it shows heavy reinvestment efforts but inconsistent dividend payments. 4. Dividend Coverage: The dividends haven't been well-supported by earnings recently, showing inconsistency. 5. Cash Flow Coverage: Mixed trends but recent improvement with positive free cash flow covering dividends better now. 6. Dividend Stability: Dividends haven't been stable over the last 20 years, with numerous years showing zero payments. 7. Payment History: Over 25 years, the dividend payment has been inconsistent with many gaps. 8. Stock Repurchasing: Inconsistent repurchasing behavior noted.

Insights for Value Investors Seeking Stable Income

Given the analysis, Cresud SACIF y (CRESY) seems like a risky investment for those primarily seeking stable and reliable dividend income. The sporadic and inconsistent dividend payments over the years, combined with low yields and inconsistent stock repurchases, imply that Cresud might not be the best choice for income-focused investors. Further, its recent improvement in free cash flow coverage may warrant a cautious watch, but overall, for those seeking steady dividends, this stock may not align well with their investment goals.

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 indicates how much a company pays out in dividends each year relative to its stock price. It is a crucial measure of the annual income received by an investor from a dividend-paying stock.

For Cresud SACIF y (CRESY), the current dividend yield stands at a mere 0.0043%, starkly lower than the industry average of 2.55%. Historically, the company has had fluctuating dividend yields. In its peak years, such as 2011 with a yield of 1.467%, Cresud provided juicy returns; however, in many years, the yield has been zero. Exceptionally high industry averages, like the 13.15% in 2011 highlight that competitors have consistently provided better yields. Given the stock price volatility, with values ranging from $4.62 to $20.19, and Cresud's sporadic dividends, this low current yield signals a weakening dividend reliability compared to industry peers, negatively impacting Cresud's attractiveness to income-focused investors.

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

The Dividend Growth Rate shows how a company's dividend payouts have increased over time, indicating financial health and stability.

The data for Cresud SACIF y (CRESY) indicates that the company has experienced significant variability in its dividend payouts over the last 20 years. Notably, the dividend per share ratio has seen both positive and negative values, with several years where dividends were not paid at all, such as from 2015 through 2022. The average dividend ratio during this period is approximately 9.58%, which exceeds the 5% threshold. However, the consistency of these payouts is questionable due to erratic distributions and even cuts to dividends, such as -100 in 2018. Therefore, while the average suggests a potentially positive trend, the inconsistent nature of the payouts indicates a less stable dividend policy, which could be considered a negative factor for long-term dividend growth reliability.

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

Payout Ratio is the percentage of earnings paid to shareholders in dividends. Lower than 65% indicates more earnings retained for growth

Cresud SACIF y's average payout ratio over the last 20 years is approximately 2.02%, which is significantly lower than the benchmark of 65%. This exceptionally low payout ratio suggests that Cresud SACIF y has retained a large portion of its earnings for reinvestment into the business rather than distributing it to shareholders in the form of dividends. The payout ratios also fluctuate greatly from year to year, with several years showing a 0% payout and one significant negative year in 2013 with -80.68%. The trend towards lower payout ratios can be seen as favorable for growth-oriented investors as it implies that the company is investing heavily in its own development, which could potentially lead to higher capital gains in the long-term.

Dividends Well Covered by Earnings?

Dividends being well covered by earnings means the company generates enough earnings to cover the dividend payments without stressing its financial health.

When analyzing Cresud SACIF y's (CRESY) dividend coverage from 2003 to 2023, we see fluctuating coverage ratios, implying inconsistent earnings against dividend responsibilities. Notably, recent years depict low or zero coverage ratios, suggesting dividends aren't well-supported by earnings. This trend is adverse, raising concerns about dividend sustainability.

Dividends Well Covered by Cash Flow?

Dividends well covered by cash flow imply that a company generates sufficient free cash flow to comfortably pay out dividends. This indicates the sustainability of dividend payments without financial strain.

Considering the historical data of Cresud SACIF y (CRESY) from 2003 to 2023, we observe a mixed trend in the coverage of dividends by free cash flow. Starting with negative values up until 2010, and intermittently positive values later on, the ratio reflects how well free cash flow covers the dividend payouts. Particularly, after huge negative coverages in 2003 and 2004 of -0.087 and -4.51 respectively, the company gradually improved in the following years. The ratio turned positive in 2011 with 0.18 and showed further improvement over the following years, achieving a peak in 2023 with an astounding 2.52. This positive trend suggests a significant improvement in the company’s capabilities to pay dividends from its free cash flow, thus reflecting better financial health and potentially more sustainable dividend payments. However, the volatility observed in the earlier years suggests some risk, and investors would need to monitor consistency moving forward. The ability to maintain and improve the free cash flow positions in recent years bodes well for Cresud SACIF y’s dividend-paying abilities.

Stable Dividends Since the Company Began Paying Dividends?

Stable dividends indicate a dependable income source, which is crucial for investors relying on dividend payouts.

Analyzing Cresud SACIF y's (CRESY) dividend payments over the last 20 years, it's evident that the dividends have not remained stable. Particularly, there are multiple years, including 2010, 2014-2021, where Cresud SACIF y declared zero dividends. This inconsistency reveals that the dividend per share dropped by more than 20% in various periods, which challenges the stability criterion critically important for income-seeking investors. For example, in 2020, the dividend per share went from 0.449 in 2017 to zero, an equivalent drop of over 100%. Therefore, Cresud SACIF y does not meet the criterion for stable dividends.

Dividends Paid for Over 25 Years?

Assessing whether Cresud SACIF y (CRESY) has consistently paid dividends for over 25 years is crucial to understand the company's commitment to returning value to its shareholders. A long track record of paying dividends is usually an indicator of financial stability and disciplined management, which attracts income-focused investors.

Over the 25 years spanning from 1998 to 2023, Cresud SACIF y's dividend payment history shows significant inconsistencies. There have been multiple years, such as 2002, 2010, and the years from 2014 to 2020, where no dividends were paid. This lack of consistency can be unattractive for investors who prioritize reliable income, as it reflects potential volatility in the company's financial performance and priorities. For example, in 2013, they paid $0 per share, followed by a considerable $0.6439 in 2014, then back to $0 in 2015 onward until 2020. Furthermore, peaks like $1.1368 in 1999 and troughs such as $0 in non-consecutive years create uncertainty about future payments. Therefore, the overall lack of a stable, reliable dividend history suggests a potentially higher-risk scenario for investors banking on dividend income.

Reliable Stock Repurchases Over the Past 20 Years?

How reliable and consistent stock repurchases can influence the company’s dividend policy over a long period.

Cresud SACIF y’s (CRESY) number of shares outstanding over the past 20 years reflects fluctuations in the company's stock repurchase behavior. Periodically reducing the number of shares through repurchases can signify strategic financial management aimed at enhancing shareholder value. However, the reliability of such repurchases is questioned given the observed volatility. The company engaged in notable repurchases in the years specified (2004, 2006, 2010, 2013, 2014, 2015, 2019, and 2023). The overall inconsistency, averaging out to approximately 6.82 years of major repurchases, suggests a lack of regularity that shareholders might seek for predictable returns. Periods without repurchase activity can indicate redirecting of funds towards other growth initiatives or necessities within the company. This inconsistency presents a nuanced picture; while sporadic repurchases may provide sporadic boosts in shareholder value, they lack the steady assurance some investors might prioritize. Such trends could be interpreted as a broader strategy mirroring operational or market conditions rather than a direct commitment to returning capital to shareholders in a consistent manner, which might be worrisome for dividend-focused investors.