April 16, 2025 a 03:31 am
GRMN: Dividend Analysis - Garmin Ltd.
Garmin Ltd. exhibits a strong dividend profile with consistent growth and a robust payout history. The company's ability to sustain and gradually increase its dividend payout over the years reflects its resilient business model and solid financial health. Investors seeking a blend of stability and moderate income growth may find Garmin Ltd. to be a compelling addition to their portfolio.
📊 Overview
Garmin Ltd. is positioned in the technology sector and demonstrates a stable dividend yield of 1.64%. A consistent annual dividend per share of $2.98 underpins its 23-year uninterrupted dividend history, attesting to financial stability and shareholder commitment. Without recent cuts or suspensions, the firm showcases its reliable payout strategy.
| Sector | Dividend Yield | Current Dividend per Share | Dividend History | Last Cut/Suspension |
|---|---|---|---|---|
| Technology | 1.64% | $2.98 | 23 years | None |
🗣️ Dividend History
Historically, Garmin Ltd. has demonstrated a commitment to enhancing shareholder value through consistent and increasing dividends, which is crucial for attracting long-term investors. The absence of dividend cuts for over two decades highlights resilient operational efficiency and strategic growth.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | $1.65 |
| 2024 | $2.98 |
| 2023 | $2.92 |
| 2022 | $2.86 |
| 2021 | $2.62 |
📈 Dividend Growth
Garmin's dividend growth over the last three to five years signifies a steady and strategic enhancement of shareholder returns. This underscores the firm's capability to adapt and thrive in dynamic market conditions, maintaining investor trust and attractiveness.
| Time | Growth |
|---|---|
| 3 years | 4.39% |
| 5 years | 5.88% |
The average dividend growth is 5.88% over 5 years. This shows moderate but steady dividend growth, enhancing long-term investor confidence.
⚠️ Payout Ratio
The payout ratio is a critical indicator of dividend sustainability, with Garmin presenting a balanced payout of 40.54% based on EPS and 46.26% from FCF, suggesting prudent fiscal management while ensuring ample room for reinvestment.
| Key Figure | Ratio |
|---|---|
| EPS-based | 40.54% |
| Free cash flow-based | 46.26% |
These payout ratios indicate a disciplined approach to dividend payouts, balancing shareholder returns with corporate growth needs.
✅ Cashflow & Capital Efficiency
Efficient cash management and capital allocation are pivotal to sustaining dividends and profitability. The subsequent metrics reflect Garmin's proficiency in deploying capital to maximize shareholder value.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 3.05% | 4.80% | 3.05% |
| Earnings Yield | 3.51% | 5.24% | 5.48% |
| CAPEX to Operating Cash Flow | 13.51% | 14.17% | 31.23% |
| Stock-based Compensation to Revenue | 2.18% | 1.94% | 1.58% |
| Free Cash Flow / Operating Cash Flow Ratio | 86.49% | 85.83% | 68.77% |
Garmin's strong free cash flow yield and disciplined capital expenditure reflect a solid foundation for reinvesting into the business while supporting consistent dividend payouts.
📉 Balance Sheet & Leverage Analysis
Garmin's robust balance sheet showcases minimal leverage, with favorable debt ratios, enhancing its ability to weather financial uncertainties and maintain operational liquidity.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 1.72% | 1.61% | 1.85% |
| Debt-to-Assets | 1.40% | 1.31% | 1.48% |
| Debt-to-Capital | 1.69% | 1.59% | 1.81% |
| Net Debt to EBITDA | -1.22 | -1.24 | -0.98 |
| Current Ratio | 3.54 | 3.41 | 3.26 |
| Quick Ratio | 2.56 | 2.38 | 2.01 |
| Financial Leverage | 1.23 | 1.23 | 1.25 |
The favorable ratios indicate Garmin's strong liquidity and minimal reliance on debt, providing financial flexibility and resilience.
🔍 Fundamental Strength & Profitability
Garmin Ltd.'s profitability metrics, such as margins and returns, underscore its manufacturing efficiency and robust business model, with steady R&D investments supporting innovation and sustained competitive advantage.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 17.98% | 18.39% | 15.69% |
| Return on Assets | 14.66% | 14.99% | 12.59% |
| ROIC | 16.34% | 16.09% | 14.41% |
| Net Margin | 22.41% | 24.67% | 20.03% |
| EBIT Margin | 25.31% | 20.89% | 21.15% |
| EBITDA Margin | 25.31% | 24.29% | 24.52% |
| Gross Margin | 58.70% | 57.48% | 57.75% |
| R&D to Revenue | 15.78% | 17.30% | 17.18% |
Garmin's stable and high profitability margins reflect its efficient cost management and value-creation strategies, promising sustained growth potential.
💹 Price Development
⭐ Dividend Scoring System
| Criteria | Score | Score Bar |
|---|---|---|
| Dividend Yield | 3 | |
| Dividend Stability | 5 | |
| Dividend Growth | 4 | |
| Payout Ratio | 5 | |
| Financial Stability | 5 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 5 |
Overall Score: 36/40
🔍 Rating
Garmin Ltd.'s robust financial metrics and sound operational strategies make it a strong contender for dividend-focused investors. The blend of steady growth, minimal debt, and consistent shareholder returns positions the company as a reliable choice for long-term investment. Our analysis assigns Garmin Ltd. a high rating, with a recommendation to buy for those seeking stable income and growth.