Last update on 2024-06-27

Duerr (DUE.DE) - Dividend Analysis (Final Score: 6/8)

Analyze the Duerr (DUE.DE) dividend policy using an 8-criteria scoring system. Final score: 6/8, indicating moderately stable dividends with room for improvement.

Short Analysis - Dividend Score: 6

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

The dividend analysis for Duerr (DUE.DE) uses an 8-criteria scoring system to evaluate its dividend policy's performance and stability. Duerr scored 6 out of 8, indicating mixed results. **Here are the details:** 1. **Dividend Yield:** At 3.2741%, it's much higher than the industry average of 1.57%. 2. **Growth Rate > 5%:** Not specified in the summary. 3. **Payout Ratio < 65%:** Duerr keeps an average payout ratio of 41.21%, suggesting a sustainable policy. 4. **Earnings Coverage:** Fluctuates, indicating inconsistencies in financial health. 5. **Cash Flow Coverage:** Varied; generally well-covered but shows instability. 6. **Stable Dividends:** Not stable, with significant drops at various points. 7. **Dividends > 25 Years:** History of inconsistent payouts, especially during financial crises. 8. **Stock Repurchases:** No significant activity over the past 20 years, suggesting minimal commitment to this method of returning value.

Insights for Value Investors Seeking Stable Income

Duerr (DUE.DE) presents a mixed picture with a high dividend yield and a low average payout ratio, indicating potential for sustainable returns. However, inconsistent earnings and cash flow coverage, unstable dividend payouts, and a lack of stock repurchase activity make it a risky choice for investors seeking reliable income. **If you are a conservative investor looking for steady dividends, Duerr may not be the best option.** On the other hand, if you are willing to monitor and accept some risk, the high dividend yield could be attractive. **Overall, exercise caution and keep an eye on the company's financial health.**

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 is a financial ratio that shows how much a company pays out in dividends each year relative to its stock price. A higher yield suggests a better return on investment for shareholders in terms of dividend income.

Duerr's (DUE.DE) current dividend yield of 3.2741% is significantly higher than the industry average of 1.57%. Historically, Duerr's dividend yield has seen considerable fluctuations, with peaks of over 16% in 2003 and 2009 and lows of 0%. The current yield reflects a relatively stable period given their previous wide range. This high yield, compared to industry standards, is a positive signal indicating that Duerr is currently providing a better-than-average return to its shareholders through dividends. If this trend continues without compromising the company's financial health, it could be considered a favorable indicator for potential investors. However, past discontinuities in dividends and stock price volatility (e.g., 2008 financial crisis) suggest that potential investors should monitor the company's long-term sustainability.

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

Explain the criterion for Duerr (DUE.DE) and why it is important to consider

The criterion looks at the average annual growth rate of dividends over a long period - 20 years in this case. It’s important because a consistent growth rate above 5% is generally indicative of a company’s robust financial health and its ability to generate and return profits to shareholders on an increasingly expanding basis. A strong, steadily rising dividend can be a sign of good corporate governance and optimistic future prospects.

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

This criterion examines whether Duerr's average payout ratio has remained below 65% over the last 20 years, which indicates a sustainable dividend policy. A lower payout ratio suggests the company is retaining earnings for growth and financial stability.

Over the last 20 years, Duerr's average payout ratio was 41.21%, which is well below the threshold of 65%. This trend is very positive as it indicates a disciplined approach to dividend payments. Notably, the payout ratio was zero in several years (2004, 2005, 2006, 2007, 2010, 2023), suggesting either no dividends were paid or earnings were retained. Additionally, in challenging years like 2009 and 2019, it spiked dramatically to 188.17% and -350.26% respectively, reflecting potential financial strain. However, overall, Duerr has managed to keep the average payout ratio within a healthy range, supporting a sustainable dividend strategy.

Dividends Well Covered by Earnings?

To ensure the sustainability of dividend payouts, it's essential that a company's earnings sufficiently cover the dividends. This coverage ratio reflects financial stability and capacity to maintain or grow dividends.

Looking at Duerr (DUE.DE), the coverage ratio fluctuates significantly. While many years (e.g., 2009, 2015, 2017) show a solid coverage (>1), indicating good financial health, other years (e.g., 2008, 2010, 2021, 2022) demonstrate inadequate earnings compared to dividends. Notably, in years 2021 and 2022, coverage ratios were 0.25 and 0.264 respectively, pointing to a potential strain. Such inconsistency can be risky for dividend sustainability, suggesting a need for assessing the company's long-term earnings performance and dividend policy closely.

Dividends Well Covered by Cash Flow?

Dividends well covered by cash flow refers to how comfortably a company's free cash flow can cover its dividend payments. It is important as consistent coverage ensures dividends are sustainable without compromising financial health.

Duerr's free cash flow over the years exhibits significant fluctuations with spikes in 2013 and clear declines in 2005 and 2006. The metric of dividends covered by cash flow shows varying strengths, peaking in 2017 with 225% but also hitting worrying lows, none or barely covered, in 2003 to 2006 and 2021. Dividends appear relatively well-covered in more recent years, particularly in 2017, but inconsistent coverage rates may signal potential instability. Sustainable annual coverage finances healthy growth and return assurances but remains a concern for Duerr.

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.

Interpreting the dividends per share for Duerr over the past two decades, we see substantial variations. For instance, the dividend per share was 0 in 2004 and 2005, and 3.3 in 2015 and 2018, then dropping to 0.3 in 2021. This shows a significant lack of stability and suggests a volatile payout for income-seeking investors. Such volatility could deter conservative investors looking for steady income.

Dividends Paid for Over 25 Years?

Examine Duerr's track record of consistently paying dividends over the past 25 years. This criterion is crucial for assessing the reliability and financial stability of the company.

Duerr (DUE.DE) has shown some inconsistency in its dividend payouts over the past 25 years. Notably, the company did not pay dividends for a series of years, including 2004 to 2007 and 2010 to 2011. There were also several years with reduced dividends, such as during the financial crises. This indicates periods of financial strain or strategic reinvestment. Such gaps raise concerns about the company's ability to provide stable and reliable returns to its shareholders, making this trend not favorable for investors seeking consistent dividend income. However, Duerr has resumed and even increased dividends in more recent years, which may suggest a recovery and a potential return to stability.

Reliable Stock Repurchases Over the Past 20 Years?

This criterion examines whether Duerr has consistently repurchased its own shares, highlighting a commitment to return value to shareholders through buybacks.

Examining Duerr's stock repurchase behaviors over the last 20 years indicates that there has been practically no significant buyback activity, except for the abrupt clearing of shares to zero in 2023 which may indicate not a planned buyback but another corporate action or data error. The average repurchase rate showing a negative value (-4.012) further points to a lack of repurchase activity. This trend is generally negative for investors looking for companies that make consistent share repurchases as a method of returning value.