June 08, 2025 a 11:30 am
FAST: Dividend Analysis - Fastenal Company
Fastenal Company, with a remarkable track record of over 35 years of uninterrupted dividend history, stands as a reliable choice for income-seeking investors. The company's ability to maintain and grow its dividends is a testament to its solid business model and financial health. As an essential player in the industrial distribution sector, Fastenal's robust dividend profile is complemented by its prudent management strategies and growth potential.
📊 Overview
The data reflects Fastenal's standing in the industrial goods sector, showcasing a robust dividend yield and a strong history of dividend payments. These elements are crucial for investors focusing on income generation and growth.
| Sector | Dividend Yield | Current Dividend per Share | Dividend History | Last Cut/Suspension |
|---|---|---|---|---|
| Industrial Goods | 3.07% | 1.56 USD | 35 years | None |
📈 Dividend History
The long-standing dividend history underlines Fastenal's commitment to returning capital to shareholders. This track record is a vital indicator of the company's stability and reliability in delivering consistent returns.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 0.655 |
| 2024 | 1.170 |
| 2023 | 1.415 |
| 2022 | 1.085 |
| 2021 | 0.980 |
📈 Dividend Growth
Dividend growth is essential for evaluating the potential return on investment, as it indicates how much the dividend may increase over time. Fastenal demonstrates significant growth, reflecting its robust financial health and shareholder commitment.
| Time | Growth |
|---|---|
| 3 years | 6.08% |
| 5 years | 12.39% |
The average dividend growth is 12.39% over 5 years. This demonstrates moderate but steady dividend growth.
🗣️ Payout Ratio
The payout ratio measures the proportion of earnings a firm distributes as dividends. High payout ratios may suggest limited reinvestment capabilities, while lower ones indicate potential for increased payouts or reinvestment.
| Key Figure | Ratio |
|---|---|
| EPS-based | 77.68% |
| Free Cash Flow-based | 206.04% |
The EPS payout ratio of 77.68% indicates a solid dividend distribution, though caution is warranted with the high FCF payout ratio of 206.04%, potentially signaling cash constraints for further expansion or unexpected expenses.
💸 Cashflow & Capital Efficiency
Cash flow metrics are pivotal in evaluating the company's financial performance and its capacity to sustain operations and growth. Evaluating these aspects provides insight into Fastenal's capital efficiency and operational health.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 4.60% | 6.80% | 5.64% |
| Earnings Yield | 5.59% | 6.24% | 7.99% |
| CAPEX to Operating Cash Flow | 19.30% | 12.06% | 18.47% |
| Stock-based Compensation to Revenue | 0.11% | 0.10% | 0.10% |
| Free Cash Flow / Operating Cash Flow Ratio | 80.69% | 87.94% | 81.53% |
Fastenal's cash flow and capital metrics reflect effective operational management, though the declining free cash flow yield requires scrutiny. The company demonstrates prudent CAPEX management, ensuring sustainable growth.
💼 Balance Sheet & Leverage Analysis
Analyzing the leverage and liquidity status of Fastenal offers understanding into its capacity to manage debts and handle financial obligations efficiently.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 0.13 | 0.16 | 0.25 |
| Debt-to-Assets | 0.10 | 0.12 | 0.18 |
| Debt-to-Capital | 0.12 | 0.14 | 0.20 |
| Net Debt to EBITDA | 0.14 | 0.18 | 0.35 |
| Current Ratio | 4.67 | 4.57 | 3.96 |
| Quick Ratio | 2.28 | 2.27 | 1.79 |
Fastenal's leverage positions reflect a stable financial structure. The decreasing debt metrics coupled with a strong current ratio showcase robust financial health and liquidity.
📈 Fundamental Strength & Profitability
These assessments gauge how efficiently Fastenal is utilizing its resources to generate profit, a key determinant of investment attractiveness and company health.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 31.82% | 34.49% | 34.36% |
| Return on Assets | 24.49% | 25.88% | 23.89% |
| Margins: Net | 15.25% | 15.72% | 15.57% |
| Margins: Gross | 45.08% | 45.66% | 46.07% |
Fastenal exhibits robust profitability ratios with high returns on both equity and assets. Stable profit margins further solidify its position, indicating effective cost controls and revenue maximization strategies.
📉 Price Development
✅ Dividend Scoring System
| Criteria | Score (1-5) | Score Bar |
|---|---|---|
| Dividend yield | 4 | |
| Dividend Stability | 5 | |
| Dividend growth | 4 | |
| Payout ratio | 3 | |
| Financial stability | 5 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 5 |
Total Score: 35/40
🏆 Rating
In summary, Fastenal Company exhibits a strong dividend payout history, moderate growth potential, and robust financial health. It is suitable for investors seeking consistent income streams with potential capital growth. Given its comprehensive performance in key areas, Fastenal receives a recommended rating for long-term dividend investors.