Last update on 2024-06-27

Thales (CSF.F) - Dividend Analysis (Final Score: 5/8)

Thales (CSF.F) dividend analysis reveals a score of 5/8 based on stability and performance over 20 years, including high yield and sustainable coverage.

Short Analysis - Dividend Score: 5

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

Thales (CSF.F) has a mixed dividend analysis score of 5 out of 8 based on the criteria for evaluating a company's dividend policy. Here are the key points: 1. **Dividend Yield:** Thales has a dividend yield of 2.2687%, surpassing the industry average, which is generally good for investors seeking higher returns. 2. **Annual Growth Rate:** The dividend growth rate over the past 20 years has been 9.6545%, which is above the 5% benchmark. However, there has been significant volatility. 3. **Payout Ratio:** The average payout ratio is 21.03%, well below the 65% threshold, indicating sustainable dividend payments overall. 4. **Earnings Coverage:** Dividends are generally well covered by earnings, although there were issues in 2009 and 2010. Recent coverage ratios are strong. 5. **Cash Flow Coverage:** No specific data provided, but this is important for understanding how well dividends are covered by cash flow. 6. **Stable Dividends:** Dividends have been stable and growing since 2008, despite occasional fluctuations. 7. **History of Dividends:** Thales has been paying dividends for 16 years, missing the 25-year mark, which can be seen as a downside for some investors. 8. **Stock Repurchases:** Inconsistent and low, suggesting that Thales may focus more on other strategic uses of capital.

Insights for Value Investors Seeking Stable Income

Considering the overall analysis, Thales (CSF.F) shows a promising dividend yield and a good average growth rate, but there are some concerns regarding volatility, short history of dividend payments, and inconsistent stock repurchases. If you are an investor looking for a potentially good return with some risk, Thales could be worth looking into. However, if you seek long-term, stable dividend growth with a proven track record, you might want to explore other options.

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

Thales (CSF.F) boasts a dividend yield of 2.2687%, which notably surpasses the industry's average of 1.16%. This figure underscores Thales' strong shareholder returns. Historically, Thales' dividend yield has experienced significant fluctuations over the past 20 years. The yield was non-existent till 2008, indicating zero or negligible dividends. Post-2008, the yield appears relatively solid, with peaks around 3.3852% in 2008 and 3.2245% in 2020. The trend outlines a mix of stability and peaks, reflecting Thales' evolving dividend policy and overall financial performance. Importantly, a higher yield is generally appealing to dividend-focused investors, as it indicates a higher return on investment.

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

The Dividend Growth Rate measures the annualized percentage rate of growth of a company's dividend payments over a specific period of time. It is important because it provides insight into the company's ability to increase shareholder returns.

Analyzing the dividend data for Thales (CSF.F) from 2003 to 2023, we note that the Dividend Per Share Ratio exhibits significant volatility. For instance, in years such as 2017, we see a massive increase of 102.1277%, followed by a steep decrease of -36.8421% in 2018. Despite this volatility, the Average Dividend Ratio over the 20-year period stands at 9.6545%, which exceeds the 5% threshold. This trend can be considered positive, indicating that, on average, Thales has increased dividends at a healthy rate above the benchmark figure. However, the high amplitude of fluctuation can be a concern for investors seeking stable and predictable dividend growth.

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

The payout ratio measures the proportion of earnings paid out as dividends to shareholders, reflecting a company's dividend sustainability.

Based on the data, Thales (CSF.F) had an average payout ratio of 21.03% over the past 20 years, well below the 65% threshold. This low ratio is generally positive, implying sustainable dividend payments. However, fluctuations, particularly high negative values in 2009 and 2010, demand further scrutiny but overall, keeping it controlled below 65% indicates financial prudence.

Dividends Well Covered by Earnings?

Earnings per share (EPS) cover dividend per share (DPS) when a firm earns enough profits to pay dividends and retain some earnings. A well-covered dividend offers financial durability.

Over the past two decades, Thales (CSF.F) has generally managed to cover its dividends with its earnings. Notably, in 2009 and 2010, negative and extremely low EPS failed to cover the dividend, presenting a red flag. Recent trends (2020-2023) show Thales having robust EPS well above dividends, signifying strong coverage ratios. In 2020, the EPS/DPS ratio peaked at 1.078, offering substantial coverage. Analyzing the coverage ratios peaking around 60% to 100% consistently post-2012 reveals a stabilizing financial foundation, reducing dividend cut risks. Moreover, 2023 figures displaying a 61.94% coverage affirm this positive trajectory. Thus, the improving trend of well-covered dividends bodes positively for Thales' financial health and dividend reliability.

Dividends Well Covered by Cash Flow?

Explain the criterion for Thales (CSF.F) and why it is important to consider

free cashflow in relation to dividend coverage shows how well a company's dividend payments are covered by the cash generated from its operations.

Stable Dividends Since the Company Began Paying Dividends?

Analyzing the stability of dividends over the last 20 years can help investors understand the reliability of a company's payout. This demonstrates a company's financial discipline and security.

Looking at Thales' dividend per share history over the past 20 years, the company reported no dividend payments until 2008, starting from which the dividend payments became more consistent. There was some fluctuation, particularly noticeable in 2010 when the dividend dropped to 0.5 from 1.05 in 2009, which represents a drop of more than 50%. Despite this, overall, no year saw a drop more than 20% every subsequent year. Thales shows relatively good stability in maintaining or growing its dividend per share despite occasional fluctuations, which indicates that its dividend policy has been generally reliable, making the trend positive for income-seeking investors.

Dividends Paid for Over 25 Years?

Examine whether a company has consistently paid dividends for over 25 years as it showcases historical stability in returning value to shareholders

Thales (CSF.F) has paid dividends only since 2008, with no payouts prior to this year. This equates to a dividend payment history of around 16 years, falling short of the desired 25-year benchmark. While notable increases in dividends per share can be observed over the recent years, the lack of a longer-term record could be seen as a downside for investors prioritizing dividend consistency and longevity. The trend indicates growth, but the minimal history before 2008 could signal resurrection from bygone periods of limited returns. Consequently, this criterion is not well-met, signaling some instability in long-term dividend reliability.

Reliable Stock Repurchases Over the Past 20 Years?

An analysis of stock repurchases over the past 20 years assesses the consistency and scale of company buybacks. This criterion is crucial as it shows the company's commitment to boosting shareholder value and confidence.

When analyzing Thales (CSF.F)'s stock repurchase activity over the past 20 years, we see that there have been occasional but not necessarily consistent buybacks. Notably, significant buybacks occurred in the years 2008, 2009, 2017, 2019, 2022, and 2023. These brief moments of stock repurchasing suggest targeted strategic decisions rather than a systematic repurchase plan year-on-year. The fluctuation in the number of shares issued, such as the increase from 162,264,000 shares in 2003 to 208,507,000 in 2023, despite the occasional buybacks, indicates that overall share count has grown. This trend can generally be seen as somewhat negative since it implies that Thales isn’t regularly returning capital to shareholders through buybacks. Instead, the firm possibly favored retaining earnings for reinvestment or other strategic purposes. On average, the stock repurchases averaged out to approximately 1.2935 per year, which is relatively low. For long-term investors, this might be a red flag if they were expecting a regular return of capital through stock repurchase programs.