July 10, 2025 a 03:31 am
📊 Dividend Analysis - The Estée Lauder Companies Inc.
The Estée Lauder Companies Inc. presents a complex dividend profile marked by steady payouts and a high dividend yield. Yet, there exist underlying financial concerns reflected in its payout ratios. Investors should be apprised of the negative earnings impact and the company's financial leverage. However, the company's dividend history over 30 years establishes a considerable degree of reliability and trust, contingent on maintaining fiscal prudence amidst industry challenges.
🗣️ Overview
The Estée Lauder Companies operates in the Consumer Goods sector, characterized by a robust dividend yield of 3.54%. With a current dividend per share of 2.64 USD and a 30-year history without notable cuts or suspensions, the company exemplifies long-term consistency.
| Metric | Details |
|---|---|
| Sector | Consumer Goods |
| Dividend yield | 3.54% |
| Current dividend per share | 2.64 USD |
| Dividend history | 30 years |
| Last cut or suspension | None |
📈 Dividend History
A pronounced history spanning three decades evidences Estée Lauder's commitment to shareholder returns through dividends, which provides reassurance of stability even amidst fiscal volatility. This historic track record is vital for risk-averse investors seeking reliable income sources.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 0.70 |
| 2024 | 2.33 |
| 2023 | 2.64 |
| 2022 | 2.46 |
| 2021 | 2.19 |
🔍 Dividend Growth
Over the past 3 and 5 years, Estée Lauder has exhibited moderate dividend growth. This metric is of profound importance as it reflects the company’s capacity to increase shareholder value over time.
| Time | Growth |
|---|---|
| 3 years | 2.09% |
| 5 years | 5.65% |
The average dividend growth is 5.65% over 5 years. This shows moderate but steady dividend growth.
⚠️ Payout Ratio
The payout ratios offer insights into Estée Lauder’s financial structure. An EPS-based payout of -109.12% is alarming, reflecting recent losses. Conversely, the FCF-based payout ratio stands at a more rational 100.20%, indicating cash flow coverage potential but amplified caution is warranted.
| Key figure | Ratio |
|---|---|
| EPS-based | -109.12% |
| Free cash flow-based | 100.20% |
Such a deficit and dependency on FCF suggest operational challenges. Balancing income generation with financial obligations remains imperative for sustained dividend policies.
💸 Cashflow & Capital Efficiency
Proportionate cash flow metrics indicate the company's ability to meet its expenditure without jeopardizing its operational performance. Evaluating these metrics offers a glance into Estée Lauder’s cash efficiency against investments and earnings.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 3.81% | -2.22% | 2.18% |
| Earnings Yield | 1.03% | 1.43% | 2.61% |
| CAPEX to Operating Cash Flow | 38.94% | 190.01% | 34.21% |
| Stock-based Compensation to Revenue | 2.08% | 1.68% | 1.87% |
| Free Cash Flow / Operating Cash Flow Ratio | 61.06% | -90.01% | 65.79% |
These metrics showcase the volatility associated with cash flow management and capital expenditures, prompting an alert yet cautiously optimistic view over capital efficiency.
🏋️ Balance Sheet & Leverage Analysis
The balance sheet serves as an epitome of Estée Lauder's financial solidity, while leverage ratios help comprehend potential risks associated with its debt management and liquidity position.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 185% | 182% | 137% |
| Debt-to-Assets | 45% | 43% | 37% |
| Debt-to-Capital | 65% | 65% | 58% |
| Net Debt to EBITDA | 3.25 | 2.61 | 0.97 |
| Current Ratio | 1.41 | 1.46 | 1.60 |
| Quick Ratio | 1.01 | 0.99 | 1.10 |
| Financial Leverage | 4.08 | 4.19 | 3.74 |
Highlighting the company's financial alchemy, there is a degree of leveraged exposure that may impose constraints if left unchecked, amidst the prevailing market exigencies.
🌟 Fundamental Strength & Profitability
Key profitability indicators, such as the Return on Equity (ROE) and Return on Assets (ROA), delineate Estée Lauder’s operational efficiency and overall financial health.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 7.34% | 18.01% | 42.75% |
| Return on Assets | 1.80% | 4.30% | 11.43% |
| Net Profit Margin | 2.50% | 6.32% | 13.47% |
| EBIT Margin | 7.37% | 10.16% | 17.32% |
| EBITDA Margin | 12.69% | 14.77% | 21.35% |
| Gross Margin | 71.66% | 71.31% | 75.73% |
With fluctuating margins and declining ROE, careful observation is advised as these metrics intimately influence strategic foresight and profit realization.
💹 Price Development
✅ Dividend Scoring System
This proprietary scoring examines Estée Lauder’s dividends holistically. Each category is given a score from 1 to 5, reflecting its current performance and prospects.
| Category | Score | Score Bar |
|---|---|---|
| Dividend yield | 4 | |
| Dividend Stability | 4 | |
| Dividend growth | 3 | |
| Payout ratio | 2 | |
| Financial stability | 3 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 3 | |
| Balance Sheet Quality | 3 |
Overall Score: 27/40
🔔 Rating
Upon reviewing the dividends, financial health, and growth prospects, Estée Lauder reflects an intermediate risk-reward profile with its current yield and legacy stability. Despite financial strain evidenced by payout metrics, long-term dividend stability and historical reliability make a compelling case for income-focused investors. Strategic attention to operational improvement and financial leverage holds the potential to bolster future growth and yield sustainability.