Last update on 2024-06-28

SS&C Technologies Holdings (SSNC) - Dividend Analysis (Final Score: 6/8)

Comprehensive SS&C Technologies Holdings (SSNC) dividend analysis. Discover how SSNC scores 6 out of 8 on key metrics. Perfect for dividend-seeking investors.

Short Analysis - Dividend Score: 6

We're running SS&C Technologies Holdings (SSNC) against the 8-criteria scoring system to evaluate the performance and stability of a company's dividend policy.

SS&C Technologies Holdings (SSNC) has been assessed using an 8-criteria dividend scoring system, achieving a score of 6. SSNC's dividend yield is significantly higher than the industry average, showcasing its strong cash flow capabilities and attraction for income-focused investors. The company's dividend has grown from 0% two decades ago to 1.5367% by 2022, highlighting its increasing shareholder returns.

Insights for Value Investors Seeking Stable Income

While SSNC shows a promising dividend yield and responsibly balanced payout ratio, its inconsistent growth rate in terms of dividends and mixed stock repurchases may suggest some caution. Investors should look into SSNC for potential income, but be mindful of its historical volatility in dividend payments and repurchases.

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 a financial ratio that shows how much a company pays out in dividends each year relative to its stock price. It's important because it gives investors an indication of the income they can expect from their investment.

SS&C Technologies Holdings (SSNC) boasts a current dividend yield of 1.5367%, significantly higher than the industry average of 0.6%. This is a positive indication for income-focused investors who prioritize reliable cash flow. Over the last 20 years, SSNC's dividend yield has shown substantial growth, starting from 0% and peaking at 1.5367% in 2022. Concurrently, the industry's yield has fluctuated but generally remained lower, indicating SSNC's growing commitment to returning value to shareholders. This trend demonstrates SSNC’s robust financial position and commitment to shareholder returns, making it an attractive option for dividend-seeking investors.

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

The Dividend Growth Rate calculation involves evaluating the percentage increase in the dividend per share over a specific period. A rate higher than 5% is considered favorable for investors as it indicates growing profitability and confidence in the company's future earnings.

Based on the given dividend ratio data from 2003 to 2023, SS&C Technologies Holdings' dividend growth is erratic. There is also an inconsistency in dividend payments with zero dividends from 2003 to 2013, followed by a fluctuating pattern. This volatility does not suggest a stable or consistently high Dividend Growth Rate. The dividend increased from 0.4 in 2016 to 10 in 2023, with an average dividend ratio of 21.02%. Although the dividends grew, the inconsistency and extreme volatility may be concerning for long-term growth dependability.

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

The payout ratio is a critical metric that reflects the proportion of earnings distributed as dividends to shareholders. A sustainable payout ratio is generally considered to be below 65%, ensuring the company retains sufficient earnings for reinvestment and debt obligations.

SS&C Technologies Holdings (SSNC) has maintained a prudent average payout ratio of 18.20% over the past 20 years. This significantly below the 65% threshold, suggesting that the company has been judicious in balancing dividend distributions with reinvestment needs and financial stability. Notably, the payout ratio spiked to 111.36% in 2015 but was an anomaly in an otherwise disciplined dividend policy. In line with a commitment to rewarding shareholders while fostering growth and retaining flexibility for strategic initiatives, SSNC's trend exemplifies strong financial governance.

Dividends Well Covered by Earnings?

Dividends are well covered by the earnings

Ensuring dividends are covered by earnings is crucial for the financial health of a company, as it suggests that the business is generating enough income to reward shareholders without compromising its operations. Evaluating if SS&C Technologies Holdings (SSNC) has its dividends covered by earnings is key to assessing its sustainability.

Dividends Well Covered by Cash Flow?

Explain the criterion for SS&C Technologies Holdings (SSNC) and why it is important to consider

Dividends Well Covered by Cash Flow

Stable Dividends Since the Company Began Paying Dividends?

Analyzing the stability of dividend payments helps income-seeking investors decide if they can rely on the company for consistent cash flows.

Looking at the dividend per share data for SS&C Technologies Holdings (SSNC) over the past 20 years, one can observe that the company began issuing dividends in 2014. The dividend payouts show a generally consistent upward trend from 0.0625 in 2014 to 0.88 in 2023. Importantly, there are no individual years where the dividend per share dropped by more than 20%. This indicates robust dividend stability, crucial for income-seeking investors who depend on these dividends for their regular income. Thus, SSNC has demonstrated a commendable performance in maintaining and growing its dividend payouts, which is a positive indicator.

Dividends Paid for Over 25 Years?

A company that has consistently paid dividends for over 25 years demonstrates stability and a long-term commitment to returning value to shareholders. This often signals a strong underlying business model and reliable cash flow.

SS&C Technologies Holdings (SSNC), based on the provided data, has not paid dividends for over 25 years. The regular dividend payments began in 2015. This results in a shortfall in meeting the 25-year requirement as the company has only been paying dividends for about 8 years. While the increasing dividend trend is favorable and suggests strong financial health and commitment to returning value to shareholders, it doesn’t meet the specific criterion of 25 years, indicating a relatively shorter track record in this area.

Reliable Stock Repurchases Over the Past 20 Years?

Reliable stock repurchases indicate a company's commitment to return value to shareholders, impacting stocks' supply and perceived value.

Over the past 20 years, SS&C Technologies Holdings (SSNC) has shown a mixed record in terms of share repurchases. While there were reliable repurchases in the years 2009, 2021, 2022, and 2023, the overall number of shares saw significant fluctuations. For instance, the number of shares increased notably from 129,084,000 in 2006 to 248,300,000 in 2023, which suggests that the company issued considerable shares over most periods, diluting share value. Given the average repurchases being 3.4466 over this period, it is evident that the company's commitment to stock repurchases has not been consistent and may raise concerns among investors looking for steady capital returns through buybacks. This trend is relatively unfavorable regarding the criterion of reliable stock repurchases.