Last update on 2024-06-27

Klepierre (KPR.F) - Dividend Analysis (Final Score: 2/8)

Klepierre (KPR.F) dividend analysis with a score of 2/8, assessing performance and stability over the last 20 years based on an 8-criteria scoring system.

Short Analysis - Dividend Score: 2

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

Klepierre's dividend policy has a mixed track record based on an 8-criteria scoring system. The company has a high current dividend yield of 7.0565%, which is above the industry average. However, this high yield has seen significant fluctuations, suggesting potential instability. The dividend growth rate also shows variability and doesn't meet the 5% benchmark. The average payout ratio over the last 20 years is high at 85.63%, indicating an unsustainable dividend at times. Earnings per share (EPS) and cash flows have been inconsistent, affecting the reliability of dividends. While dividends have been mostly stable since Klepierre began issuing them in 2008, they still lack a 25-year consistent payment history. Additionally, the information on stock repurchases over 20 years suggests management's mixed confidence in the company's future prospects.

Insights for Value Investors Seeking Stable Income

Given the high yield but unstable history, Klepierre's dividend policy appears risky. If you are an income-focused investor, it's essential to consider the company’s fluctuating earnings and cash flow. While recent recoveries are positive, the past volatility suggests potential future risks. Klepierre might be worth adding to a watchlist but requires careful monitoring for signs of financial stability 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?

dividend yield

Klepierre's current dividend yield stands at 7.0565%, significantly higher than the industry average of 4.15%. Over the past 20 years, Klepierre's dividend yield has seen considerable fluctuations with a notable peak at 11.7021% in 2020, followed by a regression to 7.0565% in 2023. While higher dividend yields might appear appealing for income-focused investors, they could also signal potential risks or underlying issues within the company. Understanding whether this trend represents a sustainable yield or a red flag requires further examination of Klepierre's revenue, earnings stability, and dividend payout ratios. Historically, from zero payouts in the early 2000s to peaks and troughs, the volatility in dividend yield suggests that while Klepierre is potentially lucrative, it may also experience periods of instability. Overall, the higher yield could be appealing but warrants cautious optimism until further overall financial health checks are performed. Given these factors, the trend is cautiously interpreted as mixed; attractive for returns but suggestive of past and potential future volatility.

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

The Dividend Growth Rate measures how much a company's dividend payments have increased over a specified period, typically annually. For long-term investors, a growth rate higher than 5% signals strong and reliable profitability.

Analyzing Klepierre's (KPR.F) dividend data from 2003 to 2023, the dividend growth rate is impacted by large fluctuations, including significant drops in 2021 and high growth in 2022. For a clearer assessment, we should calculate the compound annual growth rate (CAGR) to measure true growth. The average dividend ratio of 3.65% alone does not meet the 5% benchmark, implying average performance in dividend growth.

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

Evaluating the average payout ratio over an extended period, such as 20 years, gives a clear picture of a company's consistency and reliability in dividend payments. A ratio less than 65% generally indicates a sustainable dividend policy as the company retains enough earnings to reinvest for growth, cover debt, or handle unexpected expenses.

The provided average payout ratio for Klepierre over the last 20 years is 85.63%. This figure significantly exceeds the 65% threshold. Analyzing the year-by-year payout ratios, it is apparent that there are several years with particularly high or even negative ratios. For instance, years like 2008, 2010, 2012, 2013, 2018, and 2023 have considerably high payout ratios exceeding 100%, meaning the company paid out more in dividends than it earned in those years. Periods of notably high payout ratios, such as 2008 (107.42%), 2012 (166.49%), and 2019 (189.99%), suggest a less sustainable dividend policy during those times. Negative payout ratios in 2015 and 2020 indicate that the company experienced net losses. Consequently, the trend of an 85.63% average payout ratio over the past 20 years is not favorable, revealing an unstable dividend policy susceptible to the company’s fluctuating earnings.

Dividends Well Covered by Earnings?

Earnings per share (EPS) indicate how much money a company makes for each share of its stock. Analyzing this in relation to the dividends per share allows investors to see if dividends are sustainable. High EPS in relation to dividends generally signals good coverage and sustainability of dividends, which provides stability and potential growth to shareholders.

EPS for Klepierre has fluctuated significantly from 2003 to 2023. Notably, EPS has ranged from -2.7489 to 10.4579, indicating periods of both high profitability and losses. The most recent EPS (2023) is 0.6749. Comparing this to the periods with negative EPS, it suggests some recovery. For long-term stability, consistent positive EPS is favorable. The trend depicts volatility, which might concern dividend reliability.

Dividends Well Covered by Cash Flow?

Dividends Well Covered by Cash Flow signifies the company's ability to pay dividends from the net cash generated from its operations. This criterion is crucial for assessing the financial health and sustainability of the dividend payments, ensuring the company can maintain and possibly grow its dividends without compromising its operational needs or resorting to additional debt or equity financing.

Examining the provided numbers, Klepierre’s ability to cover its dividends with free cash flow over the years has shown variability. Particularly in earlier years and 2020-2021, the coverage ratio was either negative or zero, indicating times when the company could not cover dividends with cash flow. This might have been due to higher capital expenditures or other financial constraints. Furthermore, during years like 2009, 2010, and recently 2022-2023, although positive, the ratios indicate thin coverage, showing that while Klepierre has managed to cover dividends, there’s minimal buffer which can pose a potential risk during revenue declines or increased expenses. For instance, in 2011, the ratio of 1.425 suggests excess cash flow relative to dividend payout, which is very positive. However, the most recent trend in 2023 shows a ratio of 0.348, indicating a relatively low but positive buffer in covering dividends by cash flow.

Stable Dividends Since the Company Began Paying Dividends?

Stable dividends signal reliability and reduce investment risk, thereby making the stock attractive for income-focused investors.

Evaluating Klepierre's dividend per share data from 2003 to 2023, it's clear that the dividends have been fairly stable. The company began issuing dividends in 2008 and continued to do so without any major drops until 2020, when the dividend was reduced from €2.2 to €1, a decline of over 20%. However, the company recovered in 2021 and 2022, with dividends increasing to €1.7 and €1.75, respectively. The sharp drop in 2020 could be attributed to extraordinary events, notably the COVID-19 pandemic, which significantly impacted global financial markets and businesses. While the drop might be a concern, the quick recovery indicates resilience. Overall, the trend is mostly stable with a temporary setback, and this resilience is a promising sign for income-seeking investors.

Dividends Paid for Over 25 Years?

Dividends Paid for Over 25 Years examines the consistency of dividend payouts over a substantial period. This long-term metric is crucial for assessing a company's stability and dedication to returning capital to shareholders.

Klepierre (KPR.F) has been paying dividends since 2008. While it falls short of the 25-year mark, the company has demonstrated a consistent ability to return capital to shareholders over the past 16 years. Starting from 1.25 EUR per share in 2008, dividends have generally increased over the years, hitting a peak of 2.2 EUR in 2019. Although there were reductions in 2020 and subsequent increases in 2021 and 2022, the recent dividend is 1.75 EUR per share in 2023. Despite not meeting the 25-year criterion, the trend is mostly positive and demonstrates resilience, with only minor interruptions. This indicates strong financial health and effective dividend management, although investors seeking long-term consistency might need to pay attention to the company's future performance.

Reliable Stock Repurchases Over the Past 20 Years?

Explain the criterion for Klepierre (KPR.F) and why it is important to consider

The criterion of reliable stock repurchases over the past 20 years for Klepierre (KPR.F) looks at the company's history of buying back its own shares. This demonstrate the company's management's confidence in its current and future prospects and often acts as a signal to investors that a company's stocks are undervalued. Evaluating this over 20 years allows us to account for multiple economic cycles and corporate strategies, providing a comprehensive picture on management's commitment towards shareholder returns.