September 19, 2025 a 11:31 am
GRMN: Dividend Analysis - Garmin Ltd.
Garmin Ltd. offers a noteworthy dividend profile with a moderate yield of 1.52% and a consistent history of payouts over the past 24 years. The company exhibits a balanced approach to dividend distribution, demonstrated by its manageable payout ratio and steady growth metrics, notwithstanding a recent cut in 2026.
Overview 📊
Garmin Ltd. operates within the technology sector and has maintained dividend payments for 24 consecutive years. Despite a recent cut or suspension in 2026, its current dividend yield stands at 1.52%, with a dividend per share of 2.98 USD. This reflects the company's ongoing commitment to providing shareholder returns.
| Sector | Dividend Yield | Current Dividend Per Share | Dividend History | Last Cut or Suspension |
|---|---|---|---|---|
| Technology | 1.52% | 2.98 USD | 24 years | 2026 |
Dividend History 📈
Garmin Ltd.'s dividend history is a testament to its resilience and commitment to rewarding shareholders. This track record provides investors with confidence in the company's ability to deliver consistent returns despite market fluctuations.
| Year | Dividend per Share (USD) |
|---|---|
| 2026 | 0.90 |
| 2025 | 3.45 |
| 2024 | 2.98 |
| 2023 | 2.92 |
| 2022 | 2.86 |
Dividend Growth 🗣️
Dividend growth is crucial as it signals financial health and management's confidence in future earnings. Garmin Ltd. has seen moderate growth over the past years, signifying a stable increase in shareholder value.
| 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 ✅
A company's payout ratio reveals how much of its earnings are distributed as dividends. Garmin Ltd.'s EPS-based payout ratio is 36.57%, whereas its free cash flow-based ratio is 50.89%. This indicates a healthy distribution practice that leaves ample room for reinvestment and growth.
| Key figure | Ratio |
|---|---|
| EPS-based | 36.57% |
| Free cash flow-based | 50.89% |
The EPS payout ratio at 36.57% and FCF payout ratio at 50.89% are well within sustainable limits, ensuring a balance between rewarding shareholders and maintaining corporate growth.
Cashflow & Capital Efficiency 📉
Cashflow metrics are essential for understanding a company's financial performance and efficiency in utilizing capital. Garmin showcases resilience through strong cash flow yields and capital efficiency ratios.
| 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% |
The stability in Garmin's cash flow and moderate capital investments underscore its capacity for sustainable, long-term growth.
Balance Sheet & Leverage Analysis ⚠️
Analyzing the balance sheet and leverage ratios provides insight into financial stability and risk management. Garmin's low debt ratios and healthy liquidity indicate robust financial health and effective debt management.
| 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% |
| 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 strong liquidity ratios and low leverage suggest a conservative financial posture that can withstand economic uncertainties.
Fundamental Strength & Profitability 📈
Reviewing profitability metrics can help identify competitive advantages. Garmin's profitability ratios reflect healthy financial performance and operational efficiency.
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Return on Equity | 17.98% | 18.39% | 15.69% |
| Return on Assets | 14.66% | 14.99% | 12.59% |
| Net Margin | 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% |
| R&D to Revenue | 15.78% | 17.30% | 17.18% |
The strong return metrics and margins denote Garmin's operational efficiency and ability to generate substantial shareholder returns.
Price Development
Dividend Scoring System 🗣️
| Category | Score | Score Bar |
|---|---|---|
| Dividend yield | 3 | |
| Dividend Stability | 4 | |
| Dividend Growth | 3 | |
| Payout Ratio | 4 | |
| Financial Stability | 5 | |
| Dividend Continuity | 4 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 5 |
Total Score: 32 / 40
Rating 🔍
Garmin Ltd.'s dividend strategy reflects a balanced approach to sustaining dividend payments alongside growth investments. With a solid dividend history, robust financials, and prudent payout practices, it remains an attractive option for dividend-seeking investors.