July 30, 2025 a 07:31 am
FAST: Dividend Analysis - Fastenal Company
Fastenal Company, a leading player in the distribution of industrial and construction supplies, exhibits a robust dividend profile. With a strong history of consistent dividend payments, Fastenal reflects a solid commitment to returning value to shareholders. Despite recent macroeconomic challenges, the company's performance underscores its stable financial standing and ability to maintain its dividend growth trajectory.
📊 Overview
Fastenal Company operates within the Industrial Goods sector. Its dividend profile is characterized by a modest dividend yield of 1.82%, complemented by a current dividend per share of 0.78 USD. The company boasts an impressive 35-year history of uninterrupted dividends, with no recent cuts or suspensions.
| Metric | Value |
|---|---|
| Sector | Industrial Goods |
| Dividend yield | 1.82 % |
| Current dividend per share | 0.78 USD |
| Dividend history | 35 years |
| Last cut or suspension | None |
🗣️ Dividend History
Fastenal's dividend history highlights its consistent ability to distribute earnings to shareholders, underpinning its financial stability and management's commitment to shareholder returns. Understanding this history is crucial for evaluating the company's long-term dividend reliability, especially for income-focused investors.
| Year | Dividend Per Share (USD) |
|---|---|
| 2025 | 0.655 |
| 2024 | 0.780 |
| 2023 | 0.890 |
| 2022 | 0.620 |
| 2021 | 0.56 |
📈 Dividend Growth
The dividend growth illustrates Fastenal's strategy to enhance shareholder value through gradual increases in payouts. Over the last 3 years, dividends grew by 11.68%, demonstrating a solid upward trend which reinforces investor confidence in sustainable dividend payouts.
| Time | Growth |
|---|---|
| 3 years | 11.68 % |
| 5 years | 12.39 % |
The average dividend growth is 12.39% over 5 years. This shows moderate but steady dividend growth.
📝 Payout Ratio
The payout ratio is a critical indicator of dividend sustainability. Fastenal's current EPS payout ratio stands at 75.24%, suggesting that a significant portion of earnings is returned to shareholders. The FCF payout ratio is higher at 102.19%, indicating potential constraints if not aligned with earnings growth.
| Key figure | Ratio |
|---|---|
| EPS-based | 75.24 % |
| Free cash flow-based | 102.19 % |
🧮 Cashflow & Capital Efficiency
Analyzing cash flow and capital efficiency metrics provides insights into operational efficiencies and the company’s capacity to generate cash. Fastenal’s metrics such as Free Cash Flow Yield and CAPEX to Operating Cash Flow ratio indicate its operational robustness.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 2.30% | 3.40% | 2.82% |
| Earnings Yield | 2.79% | 3.12% | 3.99% |
| 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 | 80.70% | 87.94% | 81.53% |
The stability of cash flow and capital efficiency at Fastenal indicates a resilient operational framework, supporting ongoing dividend payments and capital investments.
💼 Balance Sheet & Leverage Analysis
Understanding the balance sheet and leverage is essential for assessing Fastenal’s financial health. The company’s metrics such as Debt-to-Equity and Current Ratio reflect its prudent financial management.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 13.42% | 15.98% | 25.36% |
| Debt-to-Assets | 10.33% | 11.99% | 17.63% |
| Debt-to-Capital | 11.83% | 13.78% | 20.23% |
| 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 |
| Financial Leverage | 1.30 | 1.33 | 1.44 |
With a strong balance sheet and low leverage, Fastenal demonstrates its capacity to withstand economic pressures and maintain fiscal stability.
🏆 Fundamental Strength & Profitability
Profitability metrics are crucial in appraising Fastenal's ability to generate earnings relative to its expenses. Strong returns on equity and assets alongside stable margins indicate efficient cost management and strong competitive positioning.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 31.82% | 34.49% | 34.36% |
| Return on Assets | 24.49% | 25.88% | 23.90% |
| Net Profit Margin | 15.25% | 15.72% | 15.57% |
| EBIT Margin | 20.08% | 20.81% | 20.83% |
| EBITDA Margin | 22.41% | 23.22% | 23.36% |
| Gross Margin | 45.08% | 45.66% | 46.07% |
| Research & Development to Revenue | 0% | 0% | 0% |
Fastenal's profitability metrics underscore strong operational performance, validating its business model and strategic execution.
📉 Price Development
✅ Dividend Scoring System
| Criteria | Score | |
|---|---|---|
| Dividend yield | 3 | |
| Dividend Stability | 5 | |
| Dividend growth | 4 | |
| Payout ratio | 3 | |
| Financial stability | 5 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 5 |
Total Score: 34/40
💬 Rating
Fastenal Company exhibits strong dividend attributes, with exceptional stability and moderate growth. The solid financial foundation and low leverage enhance its rating as a reliable dividend stock. Investors seeking consistency, backed by financial resilience, will find Fastenal a suitable long-term holding.