Last update on 2024-06-27

Jenoptik (JEN.DE) - Dividend Analysis (Final Score: 4/8)

Jenoptik (JEN.DE) dividend analysis: performance and stability evaluated using an 8-criteria scoring system. Final score: 4/8, yielding insights for investors.

Short Analysis - Dividend Score: 4

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

The dividend analysis for Jenoptik (JEN.DE) used an 8-criteria scoring system and earned a score of 4. Here are the key findings: 1. **Dividend Yield**: Jenoptik's yield of 1.0549% is higher than the industry average of 0.77%, showing a competitive return for shareholders. 2. **Growth Rate**: Over 20 years, the average growth rate was -0.435%, indicating volatility and inconsistency. 3. **Payout Ratio**: The average payout ratio of 9.48% is well below the ideal 65%, suggesting a conservative dividend policy. 4. **Earnings Coverage**: Dividends are generally covered by earnings since 2012, but there is room for improvement. 5. **Cash Flow Coverage**: Dividends are not consistently covered by cash flow, showing instability in sustainability. 6. **Stability**: Dividends have been stable since 2010, albeit with some fluctuations. 7. **Payment History**: Dividends have not been paid continuously over the last 25 years, displaying inconsistency. 8. **Stock Repurchases**: Jenoptik has not engaged in significant stock repurchases, indicating a preference for issuing more shares.

Insights for Value Investors Seeking Stable Income

Given Jenoptik's inconsistent dividend growth, lack of a long-term uninterrupted dividend payment record, and unstable cash flow coverage, it may not be the best choice for investors focused specifically on reliable dividend income. However, its competitive yield and conservative payout ratio might interest those willing to accept some risk for potentially higher long-term returns. As always, further due diligence is recommended before making any investment decisions.

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?

Understanding the dividend yield of a company provides insight into the income generated from investments in the company's shares relative to its current stock price. A higher yield often suggests a more lucrative investment, especially when compared to the industry average.

Jenoptik's current dividend yield of 1.0549% surpasses the industry average of 0.77%, indicating a competitive positioning in terms of shareholder returns. Historically, Jenoptik's dividend yield has seen considerable fluctuations, peaking at 4.023% in 2003 and reaching its lowest point at 0% in the years 2004 through 2011. The stability improved after 2011, with consistently positive yields from 2012 onwards. A striking comparison can be made in the stretched timeline: while the industry average has mostly remained below or around 1%, Jenoptik often outperformed. Even with yearly variations, the consistent higher-than-average yield reflects stable shareholder commitment relatively superior to its peers. Coupled with increasing stock prices — from €8.7 in 2003 to €28.44 in 2023 — the trend appears favorable. The steady rise in dividend per share, reaching up to €0.30 in recent years, further underscores improving profitability and robust financial health. Therefore, the data trends suggest a positive and promising dividend yield performance for Jenoptik, outpacing the industry despite some historical variances.

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

Assessing the Dividend Growth Rate over a 20-year period.

Upon analyzing Jenoptik's dividend growth rates from 2003 to 2023, we notice a substantial variance in the dividend-per-share ratio. The early years show negative values, including -50% in 2003 and -100% in 2004, indicating no dividends were paid. Positive growth periods appear sporadic, and significant values were noted in 2021 at 92.31%. However, the overall average dividend growth is -0.435%, which demonstrates inconsistency and volatility. Thus, the dividend growth rate is not higher than 5% annually over the past 20 years, indicating a relatively poor trend in this criterion.

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

The payout ratio indicates the proportion of earnings a company distributes to shareholders in the form of dividends. An average payout ratio lower than 65% often signifies a company's ability to sustainably support dividend payments while retaining adequate earnings for growth and operations.

Jenoptik's average payout ratio over the last 20 years is approximately 9.48%, which is well below the 65% threshold. This is indicative of a conservative dividend policy, suggesting the company prioritizes reinvestment in its operations and growth initiatives. Notably, the payout ratio was negative in 2003 and zero from 2004 to 2009, indicating periods of non-dividend payments potentially due to reinvestment or financial restructuring. In more recent years, the payout ratios have remained modest, reflecting a stable yet cautious approach to dividend distributions. This trend is favorable for long-term sustainability and financial health.

Dividends Well Covered by Earnings?

Dividends are well covered by the earnings

Reviewing Jenoptik's dividend coverage trend reveals sporadic but overall improving metrics. Specifically, since 2012, with EPS consistently positive and dividend payouts rising gradually. In 2023, the ratio of earnings per share to dividend was approx. 0.237, a substantial improvement factoring in recent years. However, with optimal dividend cover ranging typically between 2 to 3, current figures show a shortcoming, suggesting higher dividend coverage is needed for long-term sustainability. While progress is evidenced, further robust profitability growth is required.

Dividends Well Covered by Cash Flow?

Discuss whether dividends are well covered by the company's cash flow when analyzing their sustainability and reliability for investors.

Jenoptik's free cash flow and dividend payout amount data over the years indicate that dividends are not consistently well covered by free cash flow. In several years, such as 2004, 2005, and others, the payout ratio is zero, implying no dividends were paid. However, in years where dividends were paid out, the coverage ratio (dividends as a percentage of free cash flow) fluctuated. For instance, 2003 had a high coverage ratio of 0.84, but 2008 and subsequent years until 2011 show poor coverage close to or below 0.30. A coverage ratio above 1 would indicate adequate coverage, yet Jenoptik rarely achieved this. This fluctuation in coverage ratio suggests instability in dividend sustainability, making it less attractive for dividend-focused investors despite the promising potential seen in sporadic years like 2018 (0.18) and 2021 (0.28).

Stable Dividends Since the Company Began Paying Dividends?

Stable Dividends Over the Past 20 Years. 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.

Examining the dividend distribution pattern of Jenoptik over the past 20 years shows periods of no dividends, specifically from 2004 to 2009. However, since 2010, the dividend per share has both fluctuated and increased consistently from 0.15 per share in 2012 to 0.3 per share in 2023, with slight drops observed, such as in 2020 during the pandemic when the dividend plummeted to 0.13 from 0.35 in 2019. Yet, this does not indicate a 20% year-over-year drop at other points of observation. Overall, the trend has been upward with some contractions, but Jenoptik's dividend strategy post-2010 signifies renewed commitment towards ensuring returns for income investors. [Values from Table: Peak – 35 cents, Lowest – 13 cents, Increment Percentage] It is worth noting, these dividends post-2010 are fairly stable though you might observe punctual downturns due to unforeseeable financial scenarios.

Dividends Paid for Over 25 Years?

evaluating the consistency of a company's dividend payments

Upon examining Jenoptik’s (JEN.DE) dividend history from 1999 to 2023, it is evident that the company has not consistently paid dividends over the entire 25-year period. Notably, there were several years from 2004 to 2012 when the company did not distribute any dividends. This inconsistency can be seen as a potential red flag for long-term, income-focused investors who rely on stable dividend payments for their returns. Furthermore, the gaps in dividend payments and the variations in the dividend amounts point towards possibly unstable financial periods within the company, reflecting either strategic re-investments or responses to market conditions. While the company has shown improved consistency in dividend payouts from 2013 onwards, including a progressive increase from €0.15 per share in 2013 to €0.30 per share in 2023, the lack of a 25-year streak of uninterrupted dividends could dissuade investors seeking reliable income streams from considering Jenoptik as a dependable dividend-paying stock.

Reliable Stock Repurchases Over the Past 20 Years?

Reliable Stock Repurchases Over the Past 20 Years?

The critique of Jenoptik (JEN.DE) over the past 20 years shows that it has not engaged in any stock repurchases. The number of shares has generally increased, most notably in 2009 where the shares jumped from 52,034,651 to 56,254,446. This suggests that Jenoptik may prefer to issue more shares rather than repurchase them. An average repurchase rate of 0.82 indicates low to no activity in stock repurchases, which is not favorable for investors hoping for capital returns through buybacks, traditionally considered a method to enhance shareholder value by reducing the total number of shares outstanding. As buybacks can be a sign of a company's confidence in its own future profitability, the lack of activity raises questions about the firm's confidence in its long-term growth.