Last update on 2024-06-27

Steven Madden (SHOO) - Dividend Analysis (Final Score: 6/8)

Explore Steven Madden (SHOO) dividend analysis with a final score of 6/8. Assess performance and stability via an 8-criteria scoring system.

Short Analysis - Dividend Score: 6

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

Steven Madden (SHOO) has a mixed performance in its dividend policy based on an 8-criteria scoring system. The company scores a 6 overall, with the following details: 1. Dividend Yield: SHOO's current yield is 2%, higher than the industry average of 1.11%, marking it as a potentially low-risk investment. Recent trends show stability, enhancing its appeal. 2. Dividend Growth Rate: Highly volatile over 20 years, failing to consistently surpass a 5% annual growth rate. This inconsistency may be less attractive for income-seeking investors. 3. Payout Ratio: Generally below 65%, signaling dividends are well-covered by earnings in most years. Some inconsistencies, like 2023's zero earnings, pose risks. 4. Cash Flow Coverage: Variable coverage but maintaining around 30% in recent years, indicating reasonable dividend safety with occasional risks. 5. Dividend Stability: Stable increases since 2016 without significant drops. However, earlier years show irregularity. 6. 25-Year Track Record: Historical inconsistency with periodic interruptions. Recent trends are positive but don't fulfill the long-term reliability criterion. 7. Stock Repurchases: Consistent share buybacks reducing outstanding shares over 20 years, signaling company confidence and efficient capital utilization.

Insights for Value Investors Seeking Stable Income

Considering Steven Madden's (SHOO) overall stability in recent years, its higher-than-average yield, and consistent dividend payments since 2016, the stock may be worth exploring for investors. However, potential investors should be cautious about its historical volatility in dividend payments and growth rates. The inconsistent 25-year track record might concern those looking for long-term reliability. Balanced risk-takers seeking current income and growth potential might find SHOO appealing, but those preferring stable, long-term returns should monitor ongoing trends before committing.

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 ratio of a company’s annual dividend compared to its share price. It tells investors what they can expect in terms of income return on their investment. A higher yield can indicate a potentially lower-risk investment.

Steven Madden (SHOO) boasts a current dividend yield of 2%, significantly outpacing the industry average of 1.11%. Historically, SHOO's dividend yield has fluctuated, with notable highs in 2005 (3.4212%) and recent highs in 2022 (2.6283%) and 2023 (2%). The yield trend, despite being erratic, has recently stabilized around 2%, suggesting improved income returns for investors. Looking closely, the company's past reluctance to distribute dividends (with zero yields from 2003 to 2008, as well as from 2009 to 2014) could be attributed to reinvestment strategies aimed at growth. This is evidenced by the concomitant rise in stock prices, jumping from $2.6864 in 2003 to $42 in 2023. The more consistent release of dividends post-2015 aligns with higher stock price stability, a sign of financial maturity. The increase in dividend per share (reaching $0.84 in 2022 from stagnant levels in prior years), further elevates SHOO's appeal as an income-generating asset. Conclusively, while SHOO's higher-than-average dividend yield is appealing, the trend toward stability and growth affirms that the current yield is a positive indicator—demonstrating robust financial health and rewarding shareholder loyalty.

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

The Dividend Growth Rate measures how much the dividend payouts of a company have increased over a specified period, in this case, 20 years. It is important for investors seeking income growth.

The data provided shows irregular fluctuations in Steven Madden's (SHOO) dividend per share ratio over the years, with several years not paying any dividends and significant increases or decreases in certain years. Notably, the dividend ratio has been both negative and positive in some years. The dividend growth rate appears highly volatile. Importantly, the average dividend ratio of 10.5644 suggests consistency might be lacking. Thus, when examining this data, it is challenging to confirm a consistent growth rate exceeding 5%. Consequently, this criterion does not paint a stable picture of dividend growth for SHOO, which could be viewed negatively for those seeking regular and growing dividend income.

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

Explain the criterion for Steven Madden (SHOO) and why it is important to consider

The Average Payout Ratio is less than 65%. What does this signal?

Dividends Well Covered by Earnings?

Earnings per share (EPS) compared to dividends per share (DPS) shows the proportion of earnings a company pays out as dividends. It's essential to ensure dividends are well covered by earnings to signal financial health and sustainability of dividend payments.

Analyzing Steven Madden's dividend coverage from 2003 to 2023 shows mixed results. For instance, EPS in 2021 was significantly greater than DPS, indicating a healthy coverage ratio of approximately 2.43. However, negative EPS in 2020 resulted in a negative coverage ratio, signaling financial difficulties. Overall, while recent years (except 2020) displayed sufficient earnings to cover dividends, the sustainability of this trend should be monitored. A specific instance like 2023 with zero earnings and a dividend payout raises concerns about the payout policy. Thus, while some years indicate strong coverage, inconsistencies highlight potential risks, suggesting a cautious approach towards their dividend stability.

Dividends Well Covered by Cash Flow?

A company's dividends are considered well covered by its cash flow when the Free Cash Flow (FCF) to Dividend Payout ratio is sufficiently high. This indicates the company generates ample cash to support its dividend payments, reducing the risk of dividend cuts.

For Steven Madden (SHOO), the current and historical trend shows varying degrees of FCF coverage for its dividends. The ratio peaked in 2006 at approximately 62.27% and averaged around 33% to 37% during stable years like 2018 and 2019. For 2023, the ratio stands at 30.12%. These ratios reflect a generally safe but somewhat fluctuating dividend cover trend over the years. This indicates a cautious but stable dividend distribution framework with occasional highs and lows in coverage. The overall trend of maintaining a FCF coverage ratio around 30% in recent years is generally positive, indicating reasonable dividend safety, though the company may have better consistency.

Stable Dividends Since the Company Began Paying Dividends?

Stability in dividend payments over a long duration, particularly spanning 20 years, is critically important for income-seeking investors. This criterion evaluates whether Steven Madden (SHOO) has experienced any significant drops in its dividends per share during this period, which can imply fluctuating financial health and affect investment reliability.

Examining the dividend per share for Steven Madden (SHOO) over the past 20 years, several key observations can be made: In the early years from 2003 to approximately 2016, dividend payments were either zero or quite irregular. Notably, there was a consistent increase starting from 2016, culminating up to 2022 and maintaining steady in 2023 at $0.84 per share. According to the provided data, no year experienced a drop of more than 20%. This upward and stable trend over the last few years suggests improved financial health and a commitment to rewarding shareholders. Although the initial years showed instability, the recent five-to-seven-year trend shows a promising direction for income-seeking investors.

Dividends Paid for Over 25 Years?

Dividends paid continuously over 25 years indicate a company's steady earnings capabilities. This track record reflects long-term reliability and shareholder value.

Steven Madden (SHOO) has not paid consistent dividends over the past 25 years. From 1998 to 2005, the company did not distribute any dividends. Dividends began in 2005 but were interrupted again between 2007 and 2010. Notably, from 2018 onwards, SHOO shows a stronger dividend presence with increasing values, hitting $0.84 per share in 2022 and 2023. Although the trend in recent years is positive and suggests stability and growth, the overall 25-year record is inconsistent. For investors seeking long-term dividend reliability, this historical inconsistency could be a red flag despite the current promising trend.

Reliable Stock Repurchases Over the Past 20 Years?

Reliable stock repurchases refer to a company's consistent buyback of its own shares over a period of time, which can signal confidence in the company's future prospects and can also improve key financial metrics.

Considering Steven Madden (SHOO) over the past 20 years, there has been a notable reduction in the number of outstanding shares from 107,364,317 in 2003 to 0 in 2023, reflecting an average repurchase rate of -6.631%. The years in which significant repurchases were carried out include 2005, 2007, 2008, 2009, 2014, 2015, 2016, 2017, 2018, 2019, 2020, 2021, 2022, and 2023. The downward trend in outstanding shares indicates that the company has been consistent and reliable in its stock repurchase programs. This trend is generally positive as it indicates the company's confidence in its own future, return of value to shareholders, and potential improvement in metrics like Earnings Per Share (EPS). Additionally, a decrease in share count can also signal efficient capital utilization since the company opts to buy back shares rather than invest in potentially lower-return projects. However, an explanation is needed for the '0' value in 2023, which might suggest complete repurchase or possibly a data error.