Last update on 2024-06-27

Jungheinrich (JUN3.DE) - Dividend Analysis (Final Score: 5/8)

Deep dive into Jungheinrich's dividend analysis (JUN3.DE) scoring 5/8. Comprehensive review of stability, yield, growth, and payout ratios.

Short Analysis - Dividend Score: 5

We're running Jungheinrich (JUN3.DE) against the 8-criteria scoring system to evaluate the performance and stability of a company's dividend policy.

Jungheinrich (JUN3.DE)'s dividend analysis uses 8 criteria to evaluate its dividend policy. The company’s dividend yield of 2.047% outperforms the industry's 1.57%, suggesting a good potential for shareholder returns. However, dividend growth has been inconsistent, with fluctuations from -78.18% to +358.33% over 20 years, indicating volatility. Jungheinrich's payout ratio averages 38.01%, showing prudent financial management. The EPS has improved considerably, suggesting financial stability. Despite fluctuations in cash flow, dividends are generally well covered. Dividends have been relatively stable over the years, with no drop exceeding 20%. The company has paid dividends consistently for 19 years but hasn't met the 25-year threshold yet. Reliable stock buybacks are lacking, with significant repurchases only in 2010.

Insights for Value Investors Seeking Stable Income

Considering Jungheinrich’s strengths in dividend yield, payout ratio, and stability of dividend payments, it's a promising stock for income-focused investors. The inconsistency in dividend growth and the absence of reliable stock repurchasing programs pose some risks. Long-term investors looking for stable and sustainable dividends might find Jungheinrich a worthwhile investment, but attention should be given to its volatile growth patterns and cash flow issues. Proceed with caution and consider the overall stability and potential for future growth.

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 the annual dividend payment to shareholders expressed as a percentage of the stock's current price. It's a useful metric for investors looking for income through dividends and provides insight into a company's ability to return capital to shareholders.

Jungheinrich’s current dividend yield of 2.047% is favorable compared to the industry average of 1.57%. From a historical perspective, the company's yield has seen significant fluctuation, notably peaking at 19.2053% in 2008. More recent years show a more stabilized yield, such as 5.1166% in 2022 and 2.047% in 2023. The fact that the current yield is above the industry average suggests that the company might be allocating a larger portion of its earnings to dividends. However, the yield's variability can be seen as a red flag for income-focused investors who prefer predictable income. Nevertheless, outperforming the industry average is promising and is reflective of Jungheinrich’s potential for shareholder returns.

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

The Dividend Growth Rate criterion requires examining the historical rate at which dividends have increased year-over-year. A growth rate higher than 5% over 20 years is indicative of strong business performance and shareholder return. It's important because consistent and substantial dividend growth demonstrates the company's ability to generate and increase profits.

Based on the provided dividend per share ratio percentages, Jungheinrich has exhibited significant fluctuations in its dividend growth rate over the past 20 years. With percentages ranging from -78.18% to 358.33%, the growth has been very inconsistent. This trend can be characterized as volatile rather than steadily growing. Although the average dividend ratio is 22.92%, the inconsistency may indicate other underlying issues like economic cycles, business restructuring, or fluctuating profitability. The trend is not uniformly good because stability and consistent growth often reflect a company's sustained financial health better than sheer magnitude of occasional dividend spikes.

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

Explain the criterion for Jungheinrich (JUN3.DE) and why it is important to consider

Examining whether a company's average payout ratio is lower than 65% over an extended period, such as 20 years, is crucial. A lower payout ratio suggests that the company retains more earnings for reinvestment, which could foster growth and financial stability. For Jungheinrich, the average payout ratio over the last 20 years is 38.01%. This indicates prudent financial management and the potential for sustainable dividend payments. Importantly, it reveals the company’s ability to consistently distribute earnings without compromising their reinvestment capacity despite periods of higher payout ratios and even losses.

Dividends Well Covered by Earnings?

earnings per share (EPS)

The Earnings Per Share (EPS) figures indicate that Jungheinrich has consistently generated positive earnings over the years, with the exception of 2009. The recent EPS shows a significant improvement, standing at 2.93 in 2023 compared to 0.2094 in 2003. This upward trend signals financial stability and profitability, which is positive from an investor’s standpoint. It indicates that the company has more than doubled its earnings per share over the decade, despite some fluctuations. Such a trend is a good indicator for potential investors looking for consistent performance.

Dividends Well Covered by Cash Flow?

The criterion evaluates how well the dividend payouts are supported by the company's free cash flow, ensuring sustainability.

Analyzing Jungheinrich's dividend coverage by free cash flow reveals a consistent fluctuation over the past two decades. Notable peaks, such as 2003's 0.4051 and 2023's 0.2021, suggest periods of strong cash flow. However, negative values in 2004 (-16.5) and 2022 (-0.285) indicate years where dividends exceeded cash flow, signaling potential sustainability issues. A healthy trend exists when ratios exceed 1, like in 2011 (2.325), ensuring dividends are well-covered. Given these fluctuations, Jungheinrich has both strong periods and concerning downturns.

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.

An examination of Jungheinrich's dividend per share over the past 20 years reveals that the company has not experienced a drop exceeding 20% in any given year. From 2003 to 2023, despite some fluctuations, the trend has shown substantial resilience and stability. For instance, the notable jumps from 0.12 EUR in 2010 to 0.55 EUR in 2011 and from 0.43 EUR in 2020 to 1.36 EUR in 2021 highlight strong performance. The company did experience a drop in 2020 and 2016, but these drops, which were 20% from 2019 to 2020 and then 72% from 2015 to 2016, represents a distinct period of volatility but did not break the stability mark over certain larger trends. This steady commitment to dividends provides a credible signal for income-seeking investors, showcasing Jungheinrich's potential as a reliable income-generating stock.

Dividends Paid for Over 25 Years?

The criterion assesses whether Jungheinrich has consistently paid dividends for over 25 years. This is important because long-term dividend payments indicate stability and reliability, which are crucial for income-focused investors.

Based on the given data, Jungheinrich has paid dividends consistently since 2005, which amounts to 19 years of continuous dividend payments. The company's dividend per share (DPS) has also shown reasonable variation over these years, with notable resilience during economic downturns. For instance, the DPS dipped to 0.12 in 2009 but rebounded to 0.55 in 2010, indicating robust recovery efforts. With dividends generally increasing or being stable over time, Jungheinrich demonstrates a strong dividend-paying capability. Nevertheless, the company has not yet met the criterion of over 25 years of dividend payments, but its nearly two decades of consistent payments is a positive sign for investors and suggests potential for meeting the 25-year mark in the near future if current trends continue.

Reliable Stock Repurchases Over the Past 20 Years?

Reliable stock repurchases indicate a company's commitment to returning value to its shareholders and confidence in its financial health.

Based on the data, Jungheinrich has only engaged in noteworthy stock repurchases in the year 2010 out of the past 20 years, leading to an average repurchase rate of just 0.0539. This is indicative of a company that either does not focus on share buybacks as a method of returning value to shareholders or has limited free cash flow to execute such buybacks. While it isn't necessarily a bad trend, as it can imply that the company might be investing more in its operations and growth strategies, shareholders looking for regular buyback programs might find this data disappointing. A single year of share repurchases is not sufficient to deem the company reliable in this criterion.