April 24, 2025 a 02:46 am
ALLE: Dividend Analysis - Allegion plc
Allegion plc, a well-established player in the security products and solutions sector, offers an enticing dividend profile with a consistent history of payments over 12 years. The company boasts a moderate dividend yield and a healthy growth trajectory, making it an attractive option for dividend-seeking investors. However, investors should be aware of its high payout ratios, essential for evaluating ongoing dividend viability.
📊 Overview
Allegion operates within a relatively stable sector, providing steady cash flows and a foundation for future dividend growth. Despite its modest current yield, its robustness in maintaining dividends highlights a strong commitment to shareholders.
| Metric | Details |
|---|---|
| Sector | Security products and solutions |
| Dividend Yield | 1.57 % |
| Current Dividend Per Share | 1.92 USD |
| Dividend History | 12 years |
| Last Cut/Suspension | None |
🔎 Dividend History
Allegion's dividend history over the past 12 years demonstrates its resilience and reliability in returning cash to shareholders. This consistent performance is pivotal for those valuing stability in income streams.
| Year | Dividend Per Share (USD) |
|---|---|
| 2025 | 1.02 |
| 2024 | 1.92 |
| 2023 | 1.80 |
| 2022 | 1.64 |
| 2021 | 1.44 |
📈 Dividend Growth
Examining Allegion's dividend growth reveals a progressive increase over the past years, reflecting the company's commitment to rewarding shareholders while maintaining fiscal prudence. This growth is crucial for predicting future dividend potential.
| Time | Growth |
|---|---|
| 3 years | 10.06 % |
| 5 years | 12.20 % |
The average dividend growth is 12.20 % over 5 years. This shows moderate but steady dividend growth.
🗣️ Payout Ratio
The payout ratio is a critical measure of dividend sustainability, highlighting the proportion of earnings and cash flow allocated to dividends. Allegion's current ratios suggest managed risk, but highlight the need to monitor earnings health.
| Key Figure Ratio | Percentage |
|---|---|
| EPS-based | 27.79 % |
| Free Cash Flow-based | 28.43 % |
Allegion's payout ratios reflect a conservative approach, with substantially low percentages both in EPS (27.79 %) and Free Cash Flow (28.43 %), endorsing the stability of its dividend policy.
📉 Cashflow & Capital Efficiency
The analysis of cash flow and capital efficiency highlights Allegion's capability to generate consistent free cash flow relative to operational earnings, a sign of efficient capital utilization.
| Year | Free Cash Flow Yield | Earnings Yield | CAPEX to Operating Cash Flow | Stock-based Compensation to Revenue | FCF/OCF Ratio |
|---|---|---|---|---|---|
| 2024 | 5.12 % | 5.24 % | 13.64 % | 0.75 % | 86.36 % |
| 2023 | 4.64 % | 4.85 % | 14.02 % | 0.72 % | 85.98 % |
| 2022 | 4.27 % | 4.94 % | 13.93 % | 0.75 % | 86.07 % |
Allegion's strong free cash flow yield and manageable CAPEX provide a reassuring picture of its capital return efficiency, ensuring that growth and shareholder returns are well-supported.
💼 Balance Sheet & Leverage Analysis
Allegion's balance sheet analysis reveals its leverage and liquidity health. The debt-to-equity measures indicate the capital structure, whereas liquidity ratios reflect short-term financial health.
| Year | Debt-to-Equity | Debt-to-Assets | Debt-to-Capital | Net Debt to EBITDA | Current Ratio | Quick Ratio | Financial Leverage |
|---|---|---|---|---|---|---|---|
| 2024 | 1.33 | 0.45 | 0.57 | 1.63 | --- | 1.43 | 2.99 |
| 2023 | 1.53 | 0.47 | 0.60 | 1.88 | --- | 0.85 | 3.27 |
| 2022 | 2.22 | 0.52 | 0.69 | 2.62 | --- | 1.05 | 4.23 |
While Allegion's debt levels have increased, the company maintains sufficient financial leverage to support operations, albeit indicating higher future interest obligations.
📈 Fundamental Strength & Profitability
Allegion's profitability metrics are favorable, showcasing strong returns on equity and assets, along with healthy margins which articulate its operational efficiency and strategic prowess.
| Year | Return on Equity | Return on Assets | Net Margin | EBIT Margin | EBITDA Margin | Gross Margin | R&D to Revenue |
|---|---|---|---|---|---|---|---|
| 2024 | 39.81 % | 13.31 % | 15.84 % | 21.23 % | 24.38 % | 44.23 % | 0.00 % |
| 2023 | 40.99 % | 12.53 % | 14.80 % | 19.46 % | 22.51 % | 43.32 % | 0.00 % |
| 2022 | 48.49 % | 11.48 % | 13.99 % | 18.04 % | 21.04 % | 40.42 % | 0.00 % |
Allegion's strong Return on Equity (ROE) and consistent margin expansion highlight its proficient management and potential for shareholder wealth maximization.
📊 Price Development
✅ Dividend Scoring System
| Category | Score | Score Bar |
|---|---|---|
| Dividend Yield | 3 | |
| Dividend Stability | 5 | |
| Dividend Growth | 4 | |
| Payout Ratio | 5 | |
| Financial Stability | 4 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 3 |
Total Score: 33/40
🔍 Rating
Allegion's dividend profile stands out for its consistency and resilience. With robust growth, stable payout ratios, and a solid commitment to dividend payments, Allegion offers a compelling opportunity for dividend-focused investors. The company's fundamental strength and profitability further enhance its investment appeal. As such, Allegion warrants a "Buy" rating for those seeking steady income alongside growth potential.