May 24, 2025 a 03:31 pm
GRMN: Dividend Analysis - Garmin Ltd.
Garmin Ltd. exhibits a stable and commendable dividend profile, bolstered by its commitment to consistent dividend payouts over the past 23 years. The company reflects resilience and moderate growth in its dividend payments, making it a promising candidate for dividend-focused portfolios. Investors may find its 1.57% dividend yield on the conservative side, yet its low payout ratios and robust financial health present opportunities for sustained future returns.
📊 Overview
Garmin Ltd. operates within a dynamic sector known for technological innovation. With a dividend yield of 1.57%, and a solid track record of 23 years of payment history, the company showcases stability. Here's a detailed look:
| Key Metric | Value |
|---|---|
| Sector | Consumer Electronics |
| Dividend Yield | 1.57% |
| Current Dividend per Share | 2.98 USD |
| Dividend History | 23 years |
| Last Cut or Suspension | None |
🗣️ Dividend History
The dividend history of Garmin Ltd. is a testament to its commitment to rewarding its shareholders. Consistent dividends are crucial for long-term investors, providing a predictable income stream.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 1.65 |
| 2024 | 2.98 |
| 2023 | 2.92 |
| 2022 | 2.86 |
| 2021 | 2.62 |
📈 Dividend Growth
Garmin Ltd. has demonstrated steady dividend growth over the years, promising moderate increases which are pivotal for protecting purchasing power against inflation.
| 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.
⚖️ Payout Ratio
The payout ratio is a crucial metric indicating how well earnings support dividend payments. Garmin's ratio suggests a sustainable dividend policy with ample room for reinvestment.
| Key Figure | Ratio |
|---|---|
| EPS-based | 39.06% |
| Free cash flow-based | 47.11% |
With an EPS-based payout ratio of 39.06% and a free cash flow-based ratio of 47.11%, Garmin maintains a healthy and sustainable payout conducive to continued growth and stability.
🚀 Cashflow & Capital Efficiency
Cashflow stability and capital efficiency are paramount for dividend sustainability and expansion potential. Garmin's metrics show a commendable balance of capital allocation and liquidity management.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 3.08% | 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% |
These metrics underscore Garmin's efficient capital usage and robust cash generation, indicative of a well-managed financial structure.
📉 Balance Sheet & Leverage Analysis
A solid balance sheet and appropriate leverage ratios ensure financial security and the ability to withstand economic downturns.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 0.017 | 0.016 | 0.018 |
| Debt-to-Assets | 0.014 | 0.013 | 0.015 |
| Debt-to-Capital | 0.017 | 0.016 | 0.018 |
| Net Debt to EBITDA | -1.10 | -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 |
Garmin's leverage analysis presents a resilient financial posture with low debt levels and strong liquidity indicators.
✅ Fundamental Strength & Profitability
These metrics define the company's core financial health and efficiency, crucial for long-term profitability and sustainability.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 17.98% | 18.39% | 15.69% |
| Return on Assets | 14.66% | 14.99% | 12.59% |
| Margins: Net | 22.41% | 24.67% | 20.03% |
| EBIT Margin | 25.31% | 20.89% | 21.15% |
| EBITDA Margin | 28.17% | 24.29% | 24.52% |
| Gross Margin | 58.70% | 57.48% | 57.75% |
| Research & Development to Revenue | 15.78% | 17.30% | 17.18% |
Garmin’s strong profitability metrics, coupled with an efficient research and development expenditure, underpin its innovative edge and robust return on equity.
🔍 Price Development
🌟 Dividend Scoring System
| Category | Description | Score |
|---|---|---|
| Dividend yield | Attractive, though slightly below typical dividend stocks. | |
| Dividend Stability | Consistent payments over 23 years. | |
| Dividend growth | Steady with moderate upward trajectory. | |
| Payout ratio | Healthy balance between earnings and payouts. | |
| Financial stability | Strong financial base with low leverage. | |
| Dividend continuity | No cuts or suspensions noted in history. | |
| Cashflow Coverage | Sufficient cashflow ensures dividend reliability. | |
| Balance Sheet Quality | Highly resilient and liquid. |
Overall Score: 32/40
📝 Rating
💡 Garmin Ltd.'s dividend profile is both stable and forward-looking, making it an excellent addition to any long-term investment strategy focusing on consistent income and potential capital appreciation.