Last update on 2024-06-27

Vivendi (VVU.DE) - Dividend Analysis (Final Score: 3/8)

Discover Vivendi's (VVU.DE) dividend analysis with a 3/8 score. Learn about performance, stability, and payout history over the past 20 years.

Short Analysis - Dividend Score: 3

We're running Vivendi (VVU.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 is the annual dividend payment expressed as a percentage of the stock price. It shows the return shareholders earn from dividends alone and is important for assessing income-generating investments.

Vivendi's dividend yield of 2.5747% is just below the industry average of 2.78%. Although slightly below the average, it's crucial to evaluate this within a wider historical context. When examining the past 20 years, Vivendi shows a significant peak in its dividend yield in 2015 at around 10.15%, versus an industry peak of around 267.53% in 2008, which seems like an outlier likely due to extreme market conditions. Vivendi’s current yield, while modest compared to some past years, represents a stabilization around industry norms after spikes and plunges, possibly reflecting shifting company strategies or market responses. The consistent dividend payout can offer a stable income, but potential investors may weigh this trend against the industry and consider broader financial health, noting this slight underperformance relative to the industry average. Overall, this trend can be seen as neither sharply good nor bad but should be considered with other financial health metrics for a comprehensive view.

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

The Dividend Growth Rate evaluates the percentage change of the company's dividend to its shareholders over a given period. For long-term investors, consistent growth in dividends is a sign of the company's strong financial health, stability, and commitment to returning profits to shareholders.

The data for Vivendi (VVU.DE) indicates fluctuating dividend per share ratios over the past 20 years. Specifically, significant increases such as 7.6923% in 2009 and a notable increase of 12.5% in 2018 are observed. However, there are also steep declines like -28.5714% in 2012 and -80% in 2017. The average dividend ratio stands at approximately -0.74%, which implies an overall negative trend in dividend growth. This is not a good sign for long-term investors seeking steady dividend growth. The volatility and overall decline suggest that Vivendi lacks consistency in rewarding its shareholders, which could be due to varying income levels, strategic reinvestments, or financial instabilities.

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

The Average Payout Ratio measures the percentage of net income a company pays out as dividends. It's crucial to assess its sustainability, where a ratio lower than 65% for Vivendi would indicate robust earnings support for dividends over the long term.

Vivendi's Average Payout Ratio over the last 20 years stands at approximately 108.13%. Notably, sustainable dividend policies generally peg this ratio below 65% to ensure that the company is not overleveraging its earnings. The data provided highlights several years where the payout ratio was extraordinarily high, including 794.28% in 2012 and 449.55% in 2018—an alarming sign that in these years, dividends far exceeded net income levels. Such trends indicate potential risks in maintaining consistent dividend payouts, making it apparent that Vivendi's payout strategy over the past two decades leans toward being unsustainable. This higher-than-recommended payout ratio suggests that the company might struggle to retain sufficient earnings for growth investments and could face financial challenges during periods of declining revenue or profit drops.

Dividends Well Covered by Earnings?

Dividends are well covered by the earnings

By analyzing the EPS and DPS of Vivendi over recent decades, we can evaluate if dividends are well covered by earnings. EPS shows the company's profitability on a per-share basis, while DPS reveals the actual payout to shareholders. Stability and above 1 coverage ratio are indicators of effective management and healthy finances. From 2003 to 2023, the coverage ratio varies significantly, denoting fluctuating profitability. Positive trends are observable in 2009, 2011, 2016, and especially 2013. However, in 2015 and 2018, EPS couldn't fully cover DPS. The 2021 spike in EPS hints at possible non-recurring profits, cautioning against overly optimistic forecast based on 2021 alone.

Dividends Well Covered by Cash Flow?

Dividends well covered by cash flow means that a company's free cash flow is sufficient to pay its dividend obligations. This is important as it indicates that the company can return value to shareholders without jeopardizing its financial stability.

Analyzing Vivendi's (VVU.DE) dividend payout coverage by cash flow from 2003 to 2023, several insights can be drawn. Firstly, for the majority of the observed years, Vivendi managed to cover its dividend payouts with free cash flow (ratios >1 in several years). Notably, in 2013, cash flow coverage was concerningly negative (-389.57), suggesting an extraordinarily high dividend payout despite negative free cash flow. However, in 2022 and 2023, the company’s cash flow coverage ratios improved significantly and remained above 1 (0.719 and 0.468, respectively), reflecting a sound financial strategy in recent years. Maintaining such a trend suggests the company's ability to sustain dividends without compromising liquidity. Overall, the ability to sufficiently cover dividend payouts with free cash flow in most of the period bodes well for Vivendi's financial health and shareholder returns. Nevertheless, inconsistent coverage in certain years points to underlying volatility which should not be overlooked.

Stable Dividends Since the Company Began Paying Dividends?

Stable dividends over the past two decades demonstrate the company's commitment to returning value to shareholders and reflect its financial stability and profitability.

Vivendi's dividend per share has seen significant fluctuations over the past 20 years. Notably, there were intervals where no dividends were given (2003-2007), and the dividend dropped by more than 20% in several years: from 2 in 2017 to 0.4 in 2018, and from 0.6 in 2021 to 0.25 in 2022. Such variability indicates an inconsistency in dividend payouts, which might concern long-term, income-seeking investors. This trend is generally bad as it does not demonstrate the desired dividend stability.

Dividends Paid for Over 25 Years?

Whether a company has paid dividends for over 25 years indicates its stability and shareholder-friendliness. Companies with such a track record are often seen as financially healthy and committed to returning value to shareholders.

Vivendi's dividend history over the last 25 years shows a pattern of late dividend initiation, starting only in 2008. Before this, no dividends were paid. Starting from 2008, however, the company has consistently paid dividends almost every year. The dividend per share initially peaked at €1.4 and maintained this level for several years before varying between €1 and €2. Recent trends show a decrease, with dividends dropping to €0.25 in the last two years. The fact that Vivendi has paid dividends consistently for the last 15 years is a positive sign. However, since it does not meet the 25-year criterion, this trend is not as robust as it would be if the company had a longer history of dividend payments.

Reliable Stock Repurchases Over the Past 20 Years?

Reliable stock repurchases showcase a company's commitment to enhancing shareholder value by reducing the number of outstanding shares, thereby increasing the value of each share. It's critical to assess this over a long period to gauge consistency and financial health.

Vivendi (VVU.DE) has engaged in stock repurchases in multiple years over the past two decades, particularly in 2005, 2007, 2016, 2017, 2019, 2020, 2021, 2022, and 2023. Analyzing the number of shares for the past 20 years reveals a noticeable reduction from 1,107,422,976 shares in 2003 to 1,024,600,000 shares in 2023. This downward trend is an essential indicator that the company actively engages in buybacks. However, the average repurchase rate over these two decades stands at approximately -0.3056, suggesting a not substantial but a consistent reduction in share count. This trend is favorable as it indicates the company's ongoing commitment to returning value to shareholders. Furthermore, share buybacks have been more frequent in recent years, particularly post-2016, showcasing a renewed and consistent effort in this regard. Therefore, Vivendi's stock repurchase behavior over this period can be deemed effective in reinforcing shareholder value.