February 16, 2026 a 03:31 am
FAST: Dividend Analysis - Fastenal Company
The Fastenal Company, renowned for its robust dividend history, showcases a strong commitment to shareholder returns. With an enduring presence in the industrial and construction supplies sector, its consistent dividend growth and strategic financial management denote a promising investment landscape. This analysis delves into various financial metrics to provide a comprehensive overview of its performance and prospects.
📊 Overview
Fastenal, a key player in the industrial sector, offers a dividend yield of 2.08%, reflecting its commitment to providing value to shareholders. The current dividend per share stands impressively at $0.88, supported by a robust history of 36 years of continuous dividend payments, with no recent cuts or suspensions.
| Metric | Value |
|---|---|
| Sector | Industrial |
| Dividend yield | 2.08 % |
| Current dividend per share | 0.88 USD |
| Dividend history | 36 years |
| Last cut or suspension | None |
🗣️ Dividend History
Fastenal has demonstrated a strong and stable dividend track record. The continuity in dividend payments over 36 years underscores the company's financial health and commitment to returning capital to shareholders. Such a history is pivotal as it signifies reliability in shareholder returns.
| Year | Dividend Per Share (USD) |
|---|---|
| 2026 | 0.24 |
| 2025 | 0.875 |
| 2024 | 0.78 |
| 2023 | 0.89 |
| 2022 | 0.62 |
📈 Dividend Growth
The dividend growth rate over the past years highlights a steady increase, reinforcing shareholder confidence. Analyzing dividend growth is crucial, as it reflects the company's earnings growth and management's commitment to distributing profits back to investors.
| Time | Growth |
|---|---|
| 3 years | 12.17 % |
| 5 years | 4.56 % |
The average dividend growth is 4.56% over 5 years. This shows moderate but steady dividend growth.
💰 Payout Ratio
Payout Ratios offer insight into the sustainability of dividend payments. A high payout ratio may indicate potential pressure on the company's financials to maintain dividend payouts.
| Key figure | Ratio |
|---|---|
| EPS-based payout | 79.81 % |
| Free cash flow-based payout | 95.64 % |
With an EPS-based payout ratio of 79.81% and 95.64% based on free cash flow, the dividend payouts are substantial, but may not leave much room for other capital allocations.
⚙️ Cashflow & Capital Efficiency
Cash flow and capital efficiency metrics are vital for assessing the company's ability to generate cash and efficiently allocate it towards growth initiatives.
| Metric | 2025 | 2024 | 2023 |
|---|---|---|---|
| Free Cash Flow Yield | 2.28 % | 2.30 % | 3.40 % |
| Earnings Yield | 2.73 % | 2.79 % | 3.12 % |
| CAPEX to Operating Cash Flow | 18.93 % | 19.30 % | 12.06 % |
| Stock-based Compensation to Revenue | 0.10 % | 0.11 % | 0.10 % |
| Free Cash Flow / Operating Cash Flow Ratio | 81.07 % | 80.70 % | 87.94 % |
The analysis of cash flow metrics indicates a strong ability to generate cash and maintain capital efficiency, suggesting operational robustness.
⚠️ Balance Sheet & Leverage Analysis
Evaluating the balance sheet's strength provides insights into the company's financial stability and its ability to sustain operations through leverage management.
| Metric | 2025 | 2024 | 2023 |
|---|---|---|---|
| Debt-to-Equity | 11.21 % | 13.42 % | 15.98 % |
| Debt-to-Assets | 8.75 % | 10.33 % | 11.99 % |
| Debt-to-Capital | 10.08 % | 11.83 % | 13.78 % |
| Net Debt to EBITDA | 0.10 | 0.14 | 0.18 |
| Current Ratio | 4.85 | 4.67 | 4.57 |
| Quick Ratio | 2.41 | 2.28 | 2.27 |
| Financial Leverage | 1.28 | 1.30 | 1.33 |
The balance sheet metrics suggest strong financial stability and prudent leverage management, ensuring liquidity and operational flexibility.
✅ Fundamental Strength & Profitability
Strong fundamentals and profitability ratios indicate operational efficiency and highlight the company's ability to sustain growth in earnings and dividends.
| Metric | 2025 | 2024 | 2023 |
|---|---|---|---|
| Return on Equity | 31.91 % | 31.82 % | 34.49 % |
| Return on Assets | 24.90 % | 24.49 % | 25.88 % |
| Net Margin | 15.35 % | 15.25 % | 15.72 % |
| EBIT Margin | 20.19 % | 20.08 % | 20.81 % |
| EBITDA Margin | 20.19 % | 22.41 % | 23.22 % |
| Gross Margin | 45.01 % | 45.08 % | 45.66 % |
| Research & Development to Revenue | 0 % | 0 % | 0 % |
These profitability metrics signify robust operational efficiency, contributing to substantial shareholder returns and reinforcing investor confidence.
📉 Price Development
🎯 Dividend Scoring System
| Criterion | Score | Score Bar |
|---|---|---|
| Dividend yield | 3 | |
| Dividend Stability | 5 | |
| Dividend growth | 3 | |
| Payout ratio | 2 | |
| Financial stability | 4 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 4 |
Overall Score: 30/40
🗳️ Rating
The Fastenal Company is a stable choice for dividend-seeking investors, featuring a robust history of dividend payments and moderate growth potential. While the payout ratio is relatively high, the overall balance sheet and financial strengths provide a cushion for sustained payouts. Strategic investors can consider adding Fastenal to a balanced income-focused portfolio.