Last update on 2024-06-27

PerkinElmer (PKI) - Dividend Analysis (Final Score: 5/8)

Explore our in-depth analysis of PerkinElmer (PKI) dividend performance and stability, scored 5/8 using an 8-criteria system.

Short Analysis - Dividend Score: 5

We're running PerkinElmer (PKI) 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

Interpreting PerkinElmer's (PKI) Dividend Yield balance, it stands at 0.1157%, remarkably lower than the industry's 0.39% average, as of 2023. Historically, PKI's yield trended downwards from 1.6403% (2003) to 0.1157% (2023), contrasting industry fluctuations but acknowledging growth periods (2008, 2016). Though adverse for new dividend-focused investors, PKI released stable $0.28/share dividends over 20 years, ensuring reliable income despite nominal yield driven by rising stock price from $17.07 (2003) to $121 (2023). This yield's decline, while reflecting lower investor income, underscores PKI's potential attractiveness to capital gain-oriented stakeholders, validating recent low-end yields as viable retrenchment compared to more significant stock value expansion.

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 dividends. A rate above 5% suggests robust earnings growth and shareholder commitment.

PerkinElmer (PKI) has exhibited tremendous volatility in its dividend payouts over the last 20 years. First, it is crucial to note that for over a decade, from 2003 to 2014, the company had no dividend payouts, indicated by zeroes throughout. It wasn’t until 2015 that there was a sharp uptick to 25, followed by a negative payout in 2016 at -20 and then a consistent pattern of zero from 2017 to 2021. In 2022, the numbers fell dramatically to -50. Calculating the average dividend ratio over this period yields a value of approximately -2.14, which is well below the 5% target. The primary indication is severe inconsistency and an overall poor showing in growing shareholder value via dividends. Therefore, regarding the specific criterion of a dividend growth rate higher than 5%, PerkinElmer does not meet this criterion. This pattern is concerning for dividend-focused investors, as it portrays a lack of reliability and sustainable growth in dividend payments, hinting at broader financial management issues.

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

A payout ratio below 65% is generally considered sustainable, ensuring the company retains enough earnings for growth and other activities. Long-term averages can show consistency.

The average payout ratio of PerkinElmer over the last 20 years stands at approximately 39.79%, which is well below the 65% threshold. This indicates a consistent and sustainable level of dividends that allows the company to reinvest a significant portion of its earnings back into the business. Moreover, having a low payout ratio provides cushion against downturns or unexpected expenses without jeopardizing dividend payments. Therefore, this trend is definitely positive for PerkinElmer's financial health and demonstrates prudent management of dividends relative to earnings, thereby showing stability and predictability in shareholder returns.

Dividends Well Covered by Earnings?

Dividends are well covered by the earnings.

The dividend per share being well covered by earnings per share is a key criterion for evaluating the sustainability of dividend payments. Higher coverage suggests that a company generates sufficient earnings to comfortably pay its dividends, which is a sign of financial health and prudent management. Consistent and higher Earnings Per Share (EPS) compared to Dividends Per Share (DPS) indicates that the company can maintain or even increase dividend payments without compromising its financial stability.

Dividends Well Covered by Cash Flow?

criterion 3 evaluates whether PerkinElmer's dividends are well covered by their free cash flow over time. A higher ratio indicates a strong ability to cover dividends, while a lower ratio may raise concerns about the sustainability of dividend payments.

The Free Cash Flow has varied significantly over the years, with notable highs in 2013 and 2020. The Dividend Payout Amount, on the other hand, has been relatively stable. Analyzing the ratio of dividends covered by cash flow reveals fluctuating values, indicating periods of strong coverage (e.g., 2006 at 42.7% and 2012 at 29.1%) and periods of lower coverage, especially worrying in 2020 (3.8%) and 2021 (2.4%). The trend suggests an inconsistency which may be a red flag for dividend sustainability. Particularly concerning is the 0 value in 2023, indicating that the dividends were not covered by free cash flow at all last year.

Stable Dividends Since the Company Began Paying Dividends?

Stable dividends mean consistent income, making the investment less risky for income-seeking investors.

PerkinElmer (PKI) has maintained a stable dividend per share of $0.28 for most years from 2003 to 2014. In 2015, there was a slight increase to $0.35, followed by a return to $0.28 until 2022. However, in 2023, the dividend dropped significantly to $0.14. This indicates a drop of 50% in the most recent year. Such a reduction may be concerning for income-seeking investors, as it breaks the stability observed over the past two decades. Therefore, for this criterion, PKI fails to meet the stability requirement as the dividends saw more than a 20% drop in a given year.

Dividends Paid for Over 25 Years?

This criterion evaluates if the company has consistently paid dividends for over 25 years, indicating long-term financial health and reliability.

PerkinElmer (PKI) has managed to pay dividends consistently over the past 26 years, from 1998 to 2023. However, it is crucial to note the stability and changes in the dividend per share values. While the dividend per share remained constant at $0.28 for most of the period, there was a notable increase to $0.35 in 2017, which is a positive indicator as it demonstrates the company's ability to increase returns to shareholders. Conversely, the reduction to $0.14 in 2023 is a negative point, possibly reflecting financial struggles or a strategic reallocation of resources. This trend shows a mixed picture – it validates the company's long-term commitment but raises questions about its recent financial health and sustainability. Continuous monitoring is advised to understand management's future dividends strategy.

Reliable Stock Repurchases Over the Past 20 Years?

A company’s stock repurchases can indicate confidence in its future prospects by the management. It is an important form of returning value to shareholders, potentially increasing earnings per share and signaling undervaluation of its stock.

Analyzing PerkinElmer's stock repurchase activity over the past 20 years, we observe key periods where a reduction in shares occurred: specifically, the years 2006, 2007, 2008, 2009, 2011, 2013, 2015, 2016, 2019, and 2023. The average repurchase rate over the last two decades has been approximately -0.0541, which indicates a 5.41% reduction in share count. This trend is favorable for shareholders since such repurchases generally result in increased earnings per share (EPS) and may signal management's confidence in the company's financial robustness and undervaluation of its stock. However, despite these periodic reductions, the most recent data shows an increase in the number of shares from 2020 onwards, peaking at 126,426,000 in 2022 before slightly declining again in 2023. While the overall trend suggests a positive impact from share repurchases, the increase in share count in recent years warrants attention. It could imply various strategic or financial considerations, such as potential stock issuance for acquisitions or incentives that need to be closely monitored moving forward.