June 11, 2025 a 07:46 am
FCX: Dividend Analysis - Freeport-McMoRan Inc.
Freeport-McMoRan Inc., a major player in the mining sector, presents a dynamic yet cautious investment opportunity with its moderate dividend offerings and steady cash flow figures. With a dividend yield approaching 1.80% and a robust history of 24 years with few interruptions, the firm showcases reliable payout obligations. Stakeholders may appreciate the company's disciplined approach to capital allocation, ensuring a balance between shareholder returns and retaining capital for future growth. Nevertheless, astute investors should carefully evaluate the sustainability of its dividends relative to earnings and free cash flows.
📊 Overview
Providing a snapshot of Freeport-McMoRan Inc.'s dividend profile highlights the underlying strength and potential growth within its sector. The company operates in the metals and mining industry, characterized by cyclical dynamics that require a resilient financial strategy.
| Metric | Value |
|---|---|
| Sector | Metals and Mining |
| Dividend Yield | 1.80% |
| Current Dividend per Share | 0.60 USD |
| Dividend History | 24 years |
| Last Cut or Suspension | None |
🗣️ Dividend History
The historical dividend payments from Freeport-McMoRan underscore the company's commitment to returning capital to shareholders, with consistency in payments despite market volatilities. Analyzing past dividend disbursements reveals the company's ability to navigate economic downturns with financial prudence.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 0.30 |
| 2024 | 0.60 |
| 2023 | 0.60 |
| 2022 | 0.60 |
| 2021 | 0.225 |
📈 Dividend Growth
Dividend growth serves as a key indicator of a company's financial health and future prospects. Although moderate, Freeport-McMoRan's dividends have shown resilience over the past five years, reflecting its capacity to enhance shareholder value progressively.
| Time | Growth |
|---|---|
| 3 years | 38.67% |
| 5 years | 24.57% |
The average dividend growth is 24.57% over 5 years. This shows moderate but steady dividend growth, indicative of potential long-term stability.
📉 Payout Ratio
The payout ratio is a pivotal measure for evaluating the sustainability of the company's dividend policy. For Freeport-McMoRan, the current figures suggest a balanced approach where dividends are adequately supported by income, with room for reinvestment in business operations.
| Key figure ratio | Percentage |
|---|---|
| EPS-based | 48.62% |
| Free cash flow-based | 53.57% |
The EPS payout ratio of 48.62% and a free cash flow payout ratio of 53.57% both indicate that the company's dividends are within a manageable range, ensuring sufficient capital retention for growth initiatives.
✅ Cashflow & Capital Efficiency
| Year | 2022 | 2023 | 2024 |
|---|---|---|---|
| Free Cash Flow Yield | 3.05% | 0.75% | 4.25% |
| Earnings Yield | 6.33% | 3.02% | 3.41% |
| CAPEX to OCF | 67.50% | 91.38% | 67.15% |
| Stock-based Comp to Revenue | 0.42% | 0.48% | 0.43% |
| FCF/OCF Ratio | 32.50% | 8.62% | 32.85% |
| Return on Invested Capital | 10.17% | 8.15% | 8.82% |
The company efficiently utilizes its capital, with a robust return on invested capital (ROIC). Sustainable free cash flows paired with strategic CAPEX investments contribute to long-term fiscal stability.
⚠️ Balance Sheet & Leverage Analysis
| Year | 2022 | 2023 | 2024 |
|---|---|---|---|
| Debt-to-Equity | 68.27% | 59.02% | 55.39% |
| Debt-to-Assets | 20.79% | 18.77% | 17.75% |
| Debt-to-Capital | 40.57% | 37.12% | 35.65% |
| Net Debt to EBITDA | 0.27 | 0.59 | 0.61 |
| Current Ratio | 2.46 | 2.42 | 2.32 |
| Quick Ratio | 1.64 | 1.38 | 1.18 |
| Financial Leverage | 3.28 | 3.15 | 3.12 |
Freeport-McMoRan maintains a balanced leverage profile with declining debt ratios, underscoring its financial discipline and strong liquidity position. This bodes well for financial stability in volatile commodity markets.
🗣️ Fundamental Strength & Profitability
| Year | 2022 | 2023 | 2024 |
|---|---|---|---|
| Return on Equity | 22.29% | 11.03% | 10.74% |
| Return on Assets | 6.79% | 3.51% | 3.44% |
| Net Margin | 15.22% | 8.06% | 7.42% |
| EBIT Margin | 31.94% | 28.53% | 28.39% |
| EBITDA Margin | 40.80% | 37.58% | 37.19% |
| Gross Margin | 33.76% | 31.33% | 30.09% |
| R&D to Revenue | 0% | 0% | 0% |
Despite cyclical headwinds, Freeport-McMoRan maintains satisfactory profitability metrics. The robust return on equity and consistent margins highlight its effective cost management and scalable operations.
Price Development
📈 Dividend Scoring System
| Category | Score | Bar |
|---|---|---|
| Dividend Yield | 4 | |
| Dividend Stability | 5 | |
| Dividend Growth | 3 | |
| Payout Ratio | 4 | |
| Financial Stability | 4 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 4 |
Overall Score: 33/40
🗣️ Rating
Freeport-McMoRan Inc. emerges as a viable investment for those seeking consistent dividends with moderate growth potential. Its financial framework supports a stable dividend policy, with substantial backing from operational cash flows and strategic capital management. However, market participants should remain vigilant to cyclical industries' inherent volatility and the broader economic landscape's impact on commodity prices.