Last update on 2024-06-27

KION GROUP (KGX.DE) - Dividend Analysis (Final Score: 4/8)

Analyze the performance and stability of KION GROUP (KGX.DE) dividend policy with a final score of 4/8 based on an 8-criteria system. Learn more inside.

Short Analysis - Dividend Score: 4

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

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 measures the annual dividend payment to shareholders as a percentage of the stock's price. A yield higher than the industry average signifies an attractive return for investors seeking income through dividends.

KION GROUP's current dividend yield of 0.4913% falls significantly below the industry average of 1.67%. Over the past 15 years, the Group's dividend yield has fluctuated, showing peaks in 2022 at 5.6033% but dropping back down to the current 0.4913%. Furthermore, KION GROUP has shown variability in its dividend payments, offering higher yields in certain years compared to the industry average, notably in 2018 (2.2175%) and 2022 (5.6033%). These fluctuations can be seen alongside shifts in stock prices, indicating dynamic financial strategies that impact investor returns. The lag in dividend yield this year suggests a reassessment is needed for those specifically targeting dividend income, deeming the current trend less favorable given the diminished yield relative to broader industry figures of consistent larger returns.

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

The Dividend Growth Rate is a measure of how much a company's dividend payments have increased over a specific period. It is important because it indicates the company's ability to generate higher returns to shareholders over time.

Over the last 20 years for KION GROUP (KGX.DE), the Dividend per Share Ratio has seen significant volatility. While the exact Dividend Growth Rate calculation requires precise year-on-year data and possibly compounded annual growth, the average dividend ratio of 17.77% could initially seem high and promising. However, the drastic fluctuations— such as the negative dividend rates in 2021 (-69.40%) and 2023 (-87.33%) along with extraordinarily high positive rates like 2022 (265.85%)— suggest inconsistency. Such variations hinder the reliability and predictability of future dividend payments and, thus, make the sustainability of a consistent growth rate above 5% questionable. This trend might not be favorable for conservative dividend investors looking for stable and predictable returns.

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. An average payout ratio lower than 65% indicates a sustainable and prudent dividend policy, leaving the company enough retained earnings for growth and unforeseen circumstances.

The average payout ratio for KION GROUP (KGX.DE) over the years from 2009 to 2023 is 30.08%, which is well below the 65% threshold. This trend signifies a healthy and sustainable dividend policy. Despite some anomalies, such as the high payout in 2022 (200.67%) likely due to extraordinary circumstances, the overall strategy seems prudent. Majority of the years maintain a payout ratio significantly below 65%, indicating sound financial management and sufficient reinvestment in the business.

Dividends Well Covered by Earnings?

Dividends are considered well-covered when the earnings per share (EPS) is sufficient to cover the dividends paid out. This ensures that the company is generating enough profit to sustain its dividend payments, which is crucial for maintaining investor confidence and long-term financial stability.

KION GROUP's EPS shows a fluctuating trend with significant dips in 2009, 2010, 2011, and 2022. Notably, from 2009 to 2014, the company did not pay out dividends, likely due to negative or insufficient earnings. By 2015, the dividends per share began at €0.35 and gradually increased; however, the coverage ratios from earnings remain variable. In 2020, a concerning drop in EPS to €1.81 led to a high coverage ratio of 0.739, implying that the dividend paid (€1.34) substantially addressed available profits. By 2022, an anomalous spike revealed that the dividend as a proportion of EPS hit over 200%, likely unsustainable in the long run but could indicate a special dividend or irregular corporate financial event. The 2023 figures, however, show a return to more conservative coverage. Overall, while there are instances of insufficient coverage, particularly during downturn periods, the trend shows multiple periods of well-covered dividends. Investors should monitor KION GROUP closely for annual fluctuations and future profit sustainabilities.

Dividends Well Covered by Cash Flow?

Dividends well-covered by cash flow indicates that the company generates enough free cash flow to pay its dividends, ensuring the sustainability of dividend payments.

Examining the Free Cashflow and Dividend Payout Amount over the years, a notable observation is that KION GROUP's dividend coverage by cash flow has fluctuated significantly. The coverage was very low in initial years with several years of zero payouts and modest coverage rates. Upon reaching the years such as 2016, coverage became better around 0.31 but then saw variability peaking in 2019 at a 0.25 coverage. Notably, the year 2022 exhibited negative coverage indicating free cash flow was insufficient to cover the dividend payout. While the latest year, 2023, show a minimal ratio of 0.02 again indicating a struggle in adequately covering dividends. Such inconsistent coverage may signal financial instability which can pose concerns for dividend sustainability.

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.

Analyzing KION GROUP's dividend payments over the past 20 years reveals a lack of stability that might be concerning to income-seeking investors. From 2009 to 2014, the company did not pay any dividends. The dividends initiated in 2015 at €0.35 per share, progressively increasing until 2019, reaching a peak of €1.3397 in 2020. However, there were significant declines in subsequent years, failing to meet the stability criterion. The latest reported figure for 2023 is only €0.19 per share, representing a substantial decrease from the previous years. This trend demonstrates that KION GROUP's dividend payments have frequently fluctuated, including significant drops that could undermine confidence in its reliability for consistent income.

Dividends Paid for Over 25 Years?

Examining a company's track record of dividend payments over a long period, such as 25 years, provides insight into its stability and commitment to returning value to shareholders.

Based on the data provided for KION GROUP (KGX.DE), the company has a limited history of dividend payments, with its first recorded dividend issued in 2014. This indicates that KION GROUP has been paying dividends for only about 10 years. Thus, it does not meet the criterion of dividends paid for over 25 years. The dividend payments have been somewhat irregular, with noticeable dips in 2021 and 2023. For example, while the dividend per share was €1.5 in 2022, it dropped to €0.19 in 2023, reflecting potential instability in its dividend policy. Hence, the trend is not favorable for those seeking a long history of stable and consistent dividend payments.

Reliable Stock Repurchases Over the Past 20 Years?

Reliable stock repurchases over the past 20 years are an important indicator of shareholder value creation and capital allocation discipline. Consistent repurchases can signal confidence in the company's future earnings.

Based on the data provided, KION GROUP (KGX.DE) has not been consistently repurchasing its shares over the past 20 years. The number of shares has generally increased year over year, starting from 64,403,789 shares in 2009 to 131,100,000 shares in 2023. Only in 2019 was there a slight reduction in the number of shares. The average repurchase over the years is 5.5325, which is minimal considering the increase in issued shares. This trend suggests that KION GROUP has preferred other forms of capital allocation over stock repurchases, possibly because they found more value-enhancing opportunities, but it does not signal strong commitment to returning capital to shareholders through buybacks. This trend can be construed as negative for investors looking for consistent share repurchase programs.