Last update on 2024-06-27

Pfeiffer Vacuum Technology (PFV.DE) - Dividend Analysis (Final Score: 5/8)

Comprehensive dividend analysis of Pfeiffer Vacuum Technology (PFV.DE) based on 8 criteria, scoring 5/8. Detailed evaluation of performance and policy stability.

Short Analysis - Dividend Score: 5

We're running Pfeiffer Vacuum Technology (PFV.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 represents the return on investment from dividends alone. It helps investors gauge how much cash flow they are getting from their investment in the form of dividends. A higher dividend yield is generally attractive to income-focused investors as it provides a steady income stream.

Pfeiffer Vacuum Technology's dividend yield of 0.0713% in 2023 is far below the industry's average of 1.57%. Historically, Pfeiffer had much higher yields, such as 4.5455% in 2007 and 6.7121% in 2008. However, there has been a downward trend over recent years, culminating in this notably low figure. This sharp drop is concerning for dividend-focused investors as it signals a reduction in the income flow from dividends. The trend is particularly glaring when compared to the steady industry average, which hasn't fluctuated as drastically over the same period. Thus, current trends show that Pfeiffer is underperforming significantly in terms of dividend yield relative to the industry.

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

The Dividend Growth Rate is the annualized percentage rate of growth of a company's dividend payments. This measure is important for investors as it indicates the company's ability to consistently increase its dividends, signifying financial health and a shareholder-friendly policy. A growth rate higher than 5% over a significant period, like 20 years, is indicative of strong and stable financial performance.

Pfeiffer Vacuum Technology (PFV.DE) has exhibited an average dividend ratio of 16.53% over the past 20 years. However, the variance in the annual percentages signifies inconsistency. For instance, there were years with drastic drops such as -97.3% in 2023 and -44.4% in 2018, which disrupt the trend. Notably, there were substantive increases like 155% in 2022, overshadowing the declines momentarily. Hence, although the average growth rate is commendable, the inconsistency could be a red flag for some conservative investors.

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

The payout ratio is a metric that shows the proportion of earnings a company pays to shareholders in dividends. A payout ratio lower than 65% is generally considered healthy for maintaining dividend sustainability.

Analyzing the data from 2003 to 2023, we observe that Pfeiffer Vacuum Technology's payout ratio has varied considerably, with certain years, such as 2009 and 2013, showing payout ratios above 90%, which could indicate payout levels that might be unsustainable if prolonged. However, the average payout ratio over this 20-year period stands at approximately 54.82%, which is below the 65% threshold. This average suggests that, despite some fluctuations, the company has generally followed a conservative dividend policy that should bode well for its long-term financial health and dividend sustainability. Therefore, the trend is good for this criterion, showing that Pfeiffer Vacuum Technology has managed to keep their payout ratio within a generally acceptable range, ensuring sustainability in its dividend payments. However, the exceptionally high payout ratios in certain years warrant attention as they could signal potential stress periods.

Dividends Well Covered by Earnings?

Dividends being covered by earnings is a crucial metric. It reflects the company's ability to maintain its dividend payments from its profits, ensuring financial stability and growth potential.

A healthy dividend coverage ratio, ideally above 1, signals robust financial health. Pfeiffer Vacuum's ratio fluctuated, sometimes exceeding 1 (2009 and 2013), suggesting earnings comfortably covered dividends. However, several years had lower ratios, indicating potential payout strain. This trend highlights occasional earnings volatility relative to dividends, suggesting careful monitoring is needed.

Dividends Well Covered by Cash Flow?

Explain the criterion for Pfeiffer Vacuum Technology (PFV.DE) and why it is important to consider

The data reveals that the Free Cash Flow for Pfeiffer Vacuum Technology has fluctuated significantly over the years, with a notable negative cash flow in 2003 and again in 2022. The company's ability to cover its dividend payments with free cash flow is crucial because it demonstrates financial viability and sustainability in maintaining dividend distributions. A coverage ratio above 1 indicates that the dividend payments are well-covered by the free cash flow, ensuring that the company is not stretching its finances to reward shareholders. Coverage ratios below 1, especially those in the negative territory, suggest potential cash flow problems and could signal financial distress if the trend continues. Examining the specific coverages for Pfeiffer, the ratio has varied widely over the years. Especially concerning are the years 2003 (-0.319) and 2022 (-1.189), where the dividend payments significantly exceeded the free cash flow. On the other hand, 2007 (1.027) and 2009 (1.643) showcase exceptionally strong coverage. The recent 2022 data, however, depicts a worrying trend, indicating financial strain. Such inconsistencies underline the importance for investors to monitor both the free cash flow trends and dividend policies actively.

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.

Analyzing the dividend per share data from 2003 to 2023 for Pfeiffer Vacuum Technology (PFV.DE), it's evident that the dividends have shown variability, with certain significant drops and increases over the period. Notably, in 2023, the dividend per share dropped to 0.11 from 4.08 in 2022, representing a sharp decline by more than 20%. Income-focused investors generally prefer companies that consistently maintain or grow their dividends, as such stability can be an indicator of financial health and confidence in ongoing earnings. The sharp drop in 2023 could be concerning for these investors, suggesting a potential risk or a cash flow challenge within the company. However, it's also essential to understand the context of such variations, which could include strategic reinvestments, temporary financial stress, or shifts in market conditions. Nonetheless, the substantial drop in 2023 does highlight a variable dividend policy, which detracts from the stability criterion desired by income-seeking investors, rendering this trend unfavorable for those prioritizing consistent income.

Dividends Paid for Over 25 Years?

Analyzing if the company has paid dividends for over 25 years is a measure of its long-term stability and shareholder commitment.

Pfeiffer Vacuum Technology shows a consistent dividend payment history starting from the year 2002. Over these last 22 years, they've seen varying dividend amounts, but have managed to pay dividends consistently. For instance, starting at €0.56 per share in 2002, reaching up to €4.08 in 2021, although it dropped drastically to €0.11 in 2023. Therefore, the company falls short of the 25-year mark but does show a positive trend in sharing profits with shareholders. This trend is slightly troubling due to the recent fall, but overall indicates a good commitment.

Reliable Stock Repurchases Over the Past 20 Years?

Explain the criterion for Pfeiffer Vacuum Technology (PFV.DE) and why it is important to consider

The number of outstanding shares for Pfeiffer Vacuum Technology (PFV.DE) has fluctuated slightly but remained relatively stable over the past 20 years, ranging from 8,701,252 shares in 2003 to 0 shares in 2023. Reliable stock repurchases were conducted in the years 2004, 2008, 2009, and 2023 with an average repurchase rate of -4.3239%. This negative average indicates a net reduction in the number of shares due to repurchases, suggesting good trends, assuming 0 in 2023 implies a significant event such as buyout. This trend is positive since reducing shares typically boosts EPS and by extension, shareholder value, but context is needed for the 2023 zero value.