Last update on 2024-06-28

Scout24 (G24.DE) - Dividend Analysis (Final Score: 6/8)

Analyze the performance and stability of Scout24's (G24.DE) dividend using an 8-criteria scoring system. Final Score: 6/8.

Short Analysis - Dividend Score: 6

We're running Scout24 (G24.DE) against the 8-criteria scoring system to evaluate the performance and stability of a company's dividend policy.

Scout24 (G24.DE) was evaluated based on an 8-criteria scoring system to analyze its dividend performance and stability. The key findings are: 1. **Dividend Yield:** At 1.5586%, higher than the industry average of 0.37%. 2. **Dividend Growth Rate:** Inconsistent with significant volatility, making it hard to establish a consistent long-term growth rate above 5%. 3. **Average Payout Ratio:** Generally below 65%, with a spiked anomaly in 2019 but comfortably sustainable in subsequent years. 4. **Dividend Coverage by Earnings:** Previously unstable but now showing improved stability with a ratio of 40%-80%. 5. **Dividend Coverage by Cash Flow:** Inconsistently covered, raising concerns about long-term sustainability. 6. **Stable Dividends:** Improved stability since 2017, no more than 20% annual drop. 7. **Historical Dividend Payments:** Paying dividends for under 25 years, starting from 2017. 8. **Stock Repurchases:** Analyzing the commitment to stock buybacks is essential. Scout24 scored 6 out of 8 in performance and stability criteria.

Insights for Value Investors Seeking Stable Income

Based on the analysis, Scout24 (G24.DE) shows a promising but mixed dividend outlook. The positive aspects are the relatively high dividend yield and improved stability in recent years. However, the inconsistent growth rate, fluctuating payout ratio, and concern about cash flow coverage suggest potential risks. For investors looking for sustainable income and long-term dividend history, Scout24 might not be ideal. On the other hand, those willing to accept some risk for the potential of higher returns may find Scout24 worth investigating further. In summary, it could be a balanced consideration but warrants a deeper dive into the company's future earnings and cash flow potential.

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 annual dividend payment to shareholders, represented as a percentage of the stock's current price. A higher yield often means higher income for investors relative to the stock price, making the stock potentially more attractive. It is crucial to compare the yield with industry averages to assess relative performance.

Scout24's dividend yield of 1.5586% in 2023 is significantly higher than the industry average of 0.37%. The company's dividend yield has shown an overall increasing trend from 2017 when it started paying dividends, peaking at 2.7144% in 2020. While there was a slight decrease in the following years, the yield remained significantly above the industry average, indicating a strong performance in returning income to shareholders. For instance, during the years 2019 and 2020, Scout24's dividend yields were 2.1713% and 2.7144%, respectively, compared to industry averages of 0.17% and 0.24%. This consistent outperformance is a positive indicator of the company's shareholder value proposition.

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

The historical dividend growth rate reflects the company's ability to increase its dividend payments over time, indicating financial health and profitability trends.

Scout24 (G24.DE) has presented varying dividend percentage changes since the data was recorded, with significant volatility. With years showing drastic changes in the dividend per share, especially a drop of -54.9451% in 2021 and a substantial increase in 2018. Moreover, the dividend data shows non-payment of dividends before 2018. The erratic nature of these percentages challenges the ability to calculate a consistent long-term growth rate and fails to establish a dividend growth rate of above 5%. This trend isn't necessarily good, showing inconsistent dividend policy which can be concerning to dividend-focused investors.

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

The payout ratio is the percentage of earnings paid to shareholders in dividends. An average lower than 65% over 20 years indicates sustainable dividend policies.

For Scout24 (G24.DE), the average payout ratio over the given years is approximately 38.14%, which is comfortably below the 65% threshold. This suggests that Scout24 maintains a sustainable dividend policy. Notably, the payout ratio spiked drastically in 2019 up to 171.31% but normalized in subsequent years, indicating there may have been extraordinary circumstances or strategic decisions affecting that year. Positive trends include significantly lower payout ratios in recent years, such as 2020 at 7.85% and 2022 at 53.54%, improving financial health and dividend sustainability.

Dividends Well Covered by Earnings?

The payout ratio, or the dividends covered by earnings (calculated as Dividends per Share divided by Earnings per Share), is a critical measure for assessing whether a company's earnings are sufficient to cover its dividend payments. A lower payout ratio indicates a sustainable dividend, reducing the risk of a future dividend cut. A payout ratio above 100% is often a red flag, suggesting the company is paying more in dividends than it's earning, which is unsustainable in the long run.

Historically, Scout24's payout ratio has experienced significant fluctuations. Since dividends were introduced in 2017, the payout ratio began relatively low at about 0.29, suggesting dividends were unsustainable initially due to low earnings. By 2018, the ratio increased to around 0.36, indicating improving but still cautious earnings coverage. Notably, in 2019, the aberrant surge to 1.71 is a concerning anomaly, implying Scout24 paid out far more in dividends than its earnings, exceeding 100%. This anomaly is followed by a sharp contrast in 2020, where the ratio plummeted to 0.07, attributing to an extraordinary EPS surge. However, such drastic annual variability harms stability perception among investors. From 2021 to 2023, the payout ratio ranges between 0.41 and 0.79, reflecting an increment in dividend sustainability. Despite the improvement in EPS, stable payout ratios around 40% to 80% in recent years mark a reassuring trend that Scout24’s dividends are more comfortably covered by its earnings, although maintaining this stable range will accurately depend on consistent earnings growth.

Dividends Well Covered by Cash Flow?

Dividends well covered by cash flow indicates a company's ability to generate enough cash to meet its dividend payments, ensuring sustainability.

Analyzing Scout24's free cash flow and dividend payouts from 2013 to 2023, it appears that the company has varying degrees of coverage over the years. In 2015, there was a notable coverage of 4.01, suggesting strong cash flow relative to dividends. However, in most years, the coverage is less than 1, indicating that free cash flow is insufficient to comfortably cover dividend payments. Notably, in 2020, the strong coverage of 1.99 suggests better cash flow management. Despite these fluctuations, the trend suggests an inconsistency in coverage which could raise concerns about long-term dividend sustainability.

Stable Dividends Since the Company Began Paying Dividends?

Stable dividends over the past 20 years mean that the dividends per share did not drop by more than 20% within a single year.

Looking at Scout24's dividends per share over the last 20 years, which actually span from 2013 to 2023 due to lack of data before 2013, the absence of dividends from 2013 to 2016 followed by gradual increases from 2017 to 2023 showcases an upward momentum. We notice consistent growth from 0.3 in 2017 to reaching 1.82 in 2020. In 2021, there is a noticeable drop to 0.82, but this is not more than a 20% drop from the previous value of 1.82. Therefore, the dividends have not dropped by 20% in any given year. This trend is positive as it reflects stability and a recovering pattern of increasing dividends, indicating that the company has been on a growth trajectory in recent years, turning itself into a more stable and income-generating venture for long-term investors.

Dividends Paid for Over 25 Years?

Exploring the consistency of dividend payments over a period of 25 years helps indicate a company's longevity and reliability in rewarding shareholders.

Based on the provided data, Scout24 (G24.DE) has not been paying dividends for over 25 years. Their dividend payments started in 2017 with an initial dividend of €0.30 per share, increasing over time to €1 per share in 2023. This trend is positive and suggests that the company has been making an effort to reward its shareholders over the past few years. However, the absence of dividends before 2017 and fluctuating payments indicate that the company does not yet have a long-established history of dividend reliability. Specifically, the drop from €1.82 in 2020 to €0.82 in 2021 indicates some instability. Therefore, while the recent trend is good, the criterion of dividends being paid for over 25 years is not met. Long-term investors seeking stability may need to consider this factor.

Reliable Stock Repurchases Over the Past 20 Years?

Explain the criterion for Scout24 (G24.DE) and why it is important to consider

Reliable stock repurchases over the past 20 years imply that a company has committed to returning value to its shareholders through buybacks, in addition to dividends. This is crucial to consider because consistent buybacks can indicate management's confidence in the company's future prospects and can enhance earnings per share (EPS) by reducing the number of shares outstanding.