Last update on 2024-06-27

Deutsche Post (DHL.DE) - Dividend Analysis (Final Score: 5/8)

Comprehensive analysis of Deutsche Post (DHL.DE) dividends using 8 criteria, scoring 5/8 on performance and stability.

Short Analysis - Dividend Score: 5

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

The dividend analysis for Deutsche Post (DHL.DE) reveals mixed signals across eight criteria. On the positive side, the company boasts a dividend yield significantly higher than the industry average, reflecting a robust payout policy. The average annual dividend growth rate impressively exceeds the 5% threshold, pointing towards strong historical growth despite occasional volatility. Likewise, an average payout ratio of 46.39% over 20 years indicates reliable retention of earnings for growth and investments. Meanwhile, long-term stability is underpinned by consistent dividend payments since 2002 and a trend of keeping dividends well above the decline margin during down periods.

Insights for Value Investors Seeking Stable Income

Based on this dividend analysis, Deutsche Post (DHL.DE) presents a generally favorable option for dividend-focused investors. The higher-than-average dividend yield and impressive growth rate make it an attractive prospect. However, potential investors should be cautious about the years when earnings and cash flow coverage fall short, indicating possible risks in sustaining high payouts under less favorable market conditions. Overall, it is worth considering Deutsche Post for a dividend portfolio, but ongoing monitoring of financial performance is advised to ensure long-term viability.

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?

The dividend yield is a financial ratio that shows how much a company pays out in dividends each year relative to its stock price. For income-focused investors, a higher dividend yield can make a stock more attractive.

As of 2023, Deutsche Post has a dividend yield of 4.1249%, which is significantly higher than the industry average of 2.27%. Looking at the historical data over the last 20 years, it's evident that Deutsche Post has generally maintained a dividend yield higher than the industry average. This suggests a strong and consistent payout policy, which is attractive for income-seeking investors. The trend shows resilience, especially with notable peaks in 2008, 2011, and 2020 where the yield exceeded 4%. This consistent outperformance relative to the industry benchmark highlights Deutsche Post's dedication to returning value to its shareholders. Furthermore, given the increasing trend in the stock price, particularly the 56.54 closing price in 2021 which aligns with a high yield of 5.1165%, it indicates solid financial health and profitability driving those dividends. Therefore, the current trend is good and suggests that Deutsche Post is a reliable dividend-paying stock.

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

Explain the criterion for Deutsche Post (DHL.DE) and why it is important to consider

The average Dividend Growth Rate (DGR) over the past 20 years is 11.84%, with some noticeable fluctuations including significant peaks and troughs in certain years. This figure is considerably above the 5% threshold, indicating a strong historical growth in dividends. However, the volatility in specific years suggests variations in financial performance or different strategic decisions by the company in those years. Specifically, years like 2006 (40%), 2020 (108.6957%), and 2014 (14.2857%) stand out positively, while years like 2003, 2007, 2008, 2009, 2012, and 2021 reflected more negative impacts. Overall, maintaining an average above 5% is a positive sign, hinting at substantial dividend income potential for investors despite the occasional volatility.

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

The payout ratio represents the proportion of earnings a company pays to its shareholders in the form of dividends. A consistently lower payout ratio typically indicates that the company retains more of its earnings for growth and reinvestment.

Deutsche Post (DHL.DE) has had an average payout ratio of 46.39% over the past 20 years, which is comfortably below the 65% threshold. This is a positive sign, indicating that the company has been able to not only reward its shareholders with dividends but also retain a significant portion of its earnings for reinvestment into business operations. The one-off negative payout ratio in 2008 can be attributed to special circumstances, and the high payout ratios in 2009 and 2020 are outliers due to exceptional conditions rather than a trend. Overall, this trend is good for the company and shareholders as it shows financial stability and potential for growth.

Dividends Well Covered by Earnings?

This criterion assesses whether the company's earnings are sufficient to cover its dividend payments. It indicates financial stability and sustainability of dividend distributions.

Examining Deutsche Post's earnings per share (EPS) and dividends per share (DPS) over the years, a ratio greater than 1 suggests that dividends are comfortably covered by earnings, while a ratio below 1 indicates potential risks. Most years show a coverage ratio below 1—suggesting dividends often exceed earnings—which can be problematic long-term. Notable exceptions, such as 2009 and 2020, show high coverage amid significant EPS boosts, likely due to exceptional circumstances. Overall, the trend highlights a need for scrutiny on dividend payout policies.

Dividends Well Covered by Cash Flow?

Dividends well covered by cash flow assesses the ratio of the company's free cash flow to its dividend payout amount. It's important to ensure the company generates sufficient cash flow to comfortably cover dividend payments, indicating financial health and sustainability.

The trend of the dividend coverage ratio by free cash flow for Deutsche Post (DHL.DE) is mixed. Over the span from 2003 to 2023, there are several years where the ratio falls below 1, indicating that free cash flow was not adequate to cover dividends. Specifically, negative values in years such as 2008 and 2012 highlight years when expenses exceeded cash inflow significantly. Positive values greater than 1, like those in 2009 and 2016, suggest robust financial health during these periods. However, recent years (2021-2023) show coverage ratios ranging between approximately 0.27 and 0.38, indicating free cash flow didn't comfortably cover the dividend payouts. While the peak in 2020 suggests resilience, the dip in subsequent years warrants a cautious outlook. The overall pattern reflects cyclical inconsistencies, raising concerns about sustainable dividend payouts if similar trends continue.

Stable Dividends Since the Company Began Paying Dividends?

Stable dividends are important for income-seeking investors because they rely on steady income.

Deutsche Post (DHL.DE) demonstrates a commendable stability in its dividend payments over the past 20 years. Analyzing the historical data, there were only a few instances where the dividend per share faced reductions, the most significant being between 2008 and 2009, where the dividend dropped from 0.9 to 0.6 and subsequently in a smaller decline the following year. Nonetheless, since no year's dividend dropped by more than 20%, this trend indicates a resilient and growing dividend policy. Furthermore, the long-term growth trend from 0.4 in 2003 to 1.85 in 2023 is substantial, showcasing the company's commitment to rewarding its shareholders. This consistent performance is highly favorable for income-seeking investors looking for dependable returns and underscores Deutsche Post's robust financial health and stability.

Dividends Paid for Over 25 Years?

Dividend stability over a long period indicates a company’s commitment to returning value to shareholders and suggests financial strength and sustainability.

Deutsche Post (DHL.DE) has shown a stable commitment to paying dividends since 2002, with dividends growing from €0.27 in 2002 to €1.85 in 2023. This consistent payout over more than 20 years is a positive indicator of financial resilience and dedication to shareholder returns. However, a minor dip during the 2009 crisis and volatile increases in recent years should be noted. Overall, the long-term consistency in dividend payments supports investor confidence, making the trend favorable.

Reliable Stock Repurchases Over the Past 20 Years?

Explain the criterion for Deutsche Post (DHL.DE) and why it is important to consider

Reliable stock repurchases over the past 20 years indicate that the company has consistently demonstrated the financial strength to buy back its shares. These repurchases are typically seen as a sign of confidence by the company's management in its future prospects and can also serve to boost the per-share metrics, such as earnings per share (EPS), by reducing the number of shares outstanding.