May 02, 2025 a 02:46 am
FICO: Dividend Analysis - Fair Isaac Corporation
Fair Isaac Corporation (FICO) has had a storied history of paying dividends, yet its current dividend policy shows no growth and minimal yield at 0.06%. With a 29-year history of dividends, this suggests a strategic reevaluation of capital allocation. Investors should assess the implications of the past suspension in 2017 and consider potential dividend reinstatement strategies in the future.
📊 Overview
FICO has maintained a long-standing history of dividend payments but has not increased or reinstated dividends significantly since 2017. The company's current dividend yield stands at a negligible 0.06%, and the dividend per share is currently at 0 USD. This financial structure indicates a strategic allocation of profits elsewhere, possibly towards growth ventures or debt reduction. Being in the tech sector, high reinvestment rates are plausible for maintaining competitive advantage.
| Metric | Value |
|---|---|
| Sector | Technology |
| Dividend Yield | 0.06% |
| Current Dividend Per Share | 0 USD |
| Dividend History | 29 years |
| Last Cut or Suspension | 2017 |
📈 Dividend History
The historical data reveal a steady payment strategy until 2017, followed by suspension. A robust dividend history often reflects a company's strong cash flow generation. Investors might see the cessation as a shift towards internal growth funding or balancing financial metrics.
| Year | Dividend per Share (USD) |
|---|---|
| 2017 | 0.02 |
| 2016 | 0.08 |
| 2015 | 0.08 |
| 2014 | 0.08 |
| 2013 | 0.08 |
📈 Dividend Growth
While historically robust, FICO's lack of dividend growth in recent years indicates strategic reinvestment into higher-performing segments. Growth data over 3 and 5 years show stagnation, reinforcing the company's redirected focus.
| Time | Growth |
|---|---|
| 3 years | 0% |
| 5 years | 0% |
The average dividend growth is 0% over 5 years. This shows no dividend growth and may suggest focus on other financial metrics or strategic goals.
⚠️ Payout Ratio
A key measure of dividend sustainability, the payout ratio of earnings and free cash flow can offer insights into financial health. FICO posts a 0% payout, indicating all earnings are either reinvested or retained.
| Key figure | Ratio |
|---|---|
| EPS-based | 0% |
| Free cash flow-based | 0% |
This reflects a conservative or growth-focused policy, providing no immediate dividend relief to investors but potentially supporting strategic initiatives.
Cashflow & Capital Efficiency
The stability and effectiveness of cash flow management are crucial for maintaining business operations and funding future growth. Below, find key metrics analyzed through the latest fiscal years.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 1.30% | 2.14% | 4.69% |
| Earnings Yield | 1.07% | 1.98% | 3.48% |
| CAPEX to Operating Cash Flow | 1.40% | 0.90% | 1.18% |
| Stock-based Compensation to Revenue | 8.70% | 8.18% | 8.38% |
| Free Cash Flow / Operating Cash Flow Ratio | 98.60% | 99.09% | 98.82% |
FICO's cash flow indicators reveal strong cash generation and prudent reinvestment, valid for sustaining growth without relying heavily on external financiers.
Balance Sheet & Leverage Analysis
Understanding the leverage and overall stability of FICO's balance sheet is integral for assessing risk and financial health.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | -2.33 | -2.74 | -2.36 |
| Debt-to-Assets | 1.31 | 1.20 | 1.31 |
| Debt-to-Capital | 1.75 | 1.57 | 1.74 |
| Net Debt to EBITDA | 2.91 | 2.63 | 3.05 |
| Current Ratio | 2.11 | 1.51 | 1.46 |
| Quick Ratio | 1.62 | 1.51 | 1.46 |
| Financial Leverage | -1.78 | -2.29 | -1.80 |
With negative equity and a consistent debt stance, FICO manages cash flow effectively, but margin safety is crucial in volatile times.
Fundamental Strength & Profitability
Profitability ratios such as Return on Equity and Assets showcase a company's efficiency in utilizing resources vis-a-vis financial returns.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | -0.53 | -0.62 | -0.47 |
| Return on Assets | 0.30 | 0.27 | 0.26 |
| Margins: Net | 29.86% | 28.37% | 27.12% |
| EBIT Margin | 43.53% | 42.89% | 39.23% |
| EBITDA Margin | 44.34% | 43.86% | 41.87% |
| Gross Margin | 79.73% | 79.45% | 78.06% |
| Research & Development to Revenue | 9.70% | 10.06% | 10.56% |
Though ROE is negative, high margins depict strong pricing power and operational efficiencies, warranting an investor's attention to strategic growth initiatives.
📉 Price Development
✅ Dividend Scoring System
Utilizing a bespoke scoring system, FICO's dividend stability and overall financial health have been evaluated, providing investors with a comprehensive understanding of strengths and weaknesses.
| Criterion | Score | Visual |
|---|---|---|
| Dividend yield | 1 | |
| Dividend Stability | 3 | |
| Dividend growth | 1 | |
| Payout ratio | 3 | |
| Financial stability | 2 | |
| Dividend continuity | 2 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 3 |
Overall Score: 19/40
✅ Rating
Fair Isaac Corporation presents a mixed investing opportunity with strong historical dividend roots and a balanced, though strained, financial standing. Given current strategic focuses away from dividend distribution, potential investors should weigh the benefits of FICO's stable cash flow against the inconsistency in dividend payouts, especially amid considerable leverage. This synthesis encourages a hold perspective unless growth-oriented investments in technology space align with investor interests.