July 22, 2026 a 07:31 am
GRMN: Dividend Analysis - Garmin Ltd.
Garmin Ltd. presents itself as a solid dividend-paying company, with a track record of 25 consecutive years of dividend payments, despite its recent suspension in 2027. The company offers a moderate dividend yield, indicative of a stable income producer for long-term investors. With consistent historical growth and a prudent payout ratio, Garmin remains a reliable choice in the electronics and navigation industry.
📊 Overview
The overview provides insights into Garmin Ltd.'s sector positioning, emphasizing its consistent dividend payments over the years. Below is a table detailing key dividend metrics.
| Category | Data |
|---|---|
| Sector | Electronics & Navigation |
| Dividend yield | 1.77 % |
| Current dividend per share | 3.45 USD |
| Dividend history | 25 years |
| Last cut or suspension | 2027 |
📈 Dividend History
Garmin has demonstrated a commendable commitment to returning value to shareholders. Tracking the history of its dividend payments offers a perspective on its financial robustness. Consistent increases indicate sound financial management and a prioritization of shareholder value.
| Year | Dividend per Share (USD) |
|---|---|
| 2027 | 1.05 |
| 2026 | 4.05 |
| 2025 | 3.45 |
| 2024 | 2.98 |
| 2023 | 2.92 |
🔝 Dividend Growth
Analyzing Garmin's dividend growth reveals a steady pace over the short and medium term, reflecting its sustained capacity for income increases, which is attractive for investors focused on growth. Below is a summary of dividend growth percentages.
| Time | Growth |
|---|---|
| 3 years | 6.45 % |
| 5 years | 7.53 % |
The average dividend growth is 7.53% over 5 years. This shows moderate but steady dividend growth.
🗣️ Payout Ratio
Understanding the payout ratio is crucial as it indicates the proportion of earnings and free cash flows distributed as dividends. Garmin's relatively low payout ratios suggest a sustainable dividend policy with ample room for reinvestment in the business or adjustments if earnings fluctuate.
| Key figure | Ratio |
|---|---|
| EPS-based | 38.28 % |
| Free cash flow-based | 45.83 % |
With a 38.28% EPS payout ratio and 45.83% FCF payout ratio, Garmin demonstrates healthy coverage of its dividend payouts, suggesting low default risk and potential for future dividend increases.
💰 Cashflow & Capital Efficiency
Cashflow analysis sheds light on the company's operational efficiency and financial health. Understanding these metrics can help gauge Garmin's ability to fund its dividend payments from its internal cash generation, ensuring long-term viability.
| Year | 2025 | 2024 | 2023 |
|---|---|---|---|
| Free Cash Flow Yield | 3.45% | 3.08% | 4.80% |
| Earnings Yield | 4.21% | 3.51% | 5.24% |
| CAPEX to Operating Cash Flow | 16.56% | 13.51% | 14.17% |
| Stock-based Compensation to Revenue | 2.29% | 2.18% | 1.94% |
| Free Cash Flow / Operating Cash Flow Ratio | 83.44% | 86.49% | 85.83% |
Garmin's strong free cash flow yield and low capital expenditure requirements suggest efficient capital management, supporting steady dividend payments.
🔍 Balance Sheet & Leverage Analysis
Examining Garmin's balance sheet and leverage ratios is crucial in assessing its financial stability. Low debt ratios indicate financial resilience, which is essential for sustaining dividend payouts over economic cycles.
| Year | 2025 | 2024 | 2023 |
|---|---|---|---|
| Debt-to-Equity | 2.18% | 2.07% | 1.61% |
| Debt-to-Assets | 1.78% | 1.69% | 1.31% |
| Debt-to-Capital | 2.14% | 2.03% | 1.59% |
| Net Debt to EBITDA | -0.93 | -1.02 | -1.15 |
| Current Ratio | 4.36 | 3.54 | 3.41 |
| Quick Ratio | 2.60 | 2.56 | 2.38 |
| Financial Leverage | 1.23 | 1.23 | 1.23 |
Garmin's low leverage and robust liquidity positions provide a cushion against potential market volatility, assuring dividend sustainability.
🏋️ Fundamental Strength & Profitability
Garmin's return on equity and asset metrics showcase its operational efficiency, while profitability margins give insight into its competitive advantage and pricing power in the marketplace.
| Year | 2025 | 2024 | 2023 |
|---|---|---|---|
| Return on Equity | 18.54% | 17.98% | 18.39% |
| Return on Assets | 15.13% | 14.66% | 14.99% |
| Margins | Gross 58.74%, Net 22.96% | Gross 58.70%, Net 22.41% | Gross 57.48%, Net 24.67% |
| Research & Development to Revenue | 15.54% | 15.78% | 17.30% |
Impressive profitability and judicious R&D investments highlight Garmin’s focus on innovation, further bolstering its competitive edge.
📉 Price Development
✅ Dividend Scoring System
| Criteria | Score | Rating |
|---|---|---|
| Dividend yield | 3 | |
| Dividend Stability | 4 | |
| Dividend growth | 4 | |
| Payout ratio | 5 | |
| Financial stability | 5 | |
| Dividend continuity | 4 | |
| Cashflow Coverage | 5 | |
| Balance Sheet Quality | 5 |
Overall Score: 35/40
📊 Rating
Garmin Ltd. earns a strong rating for dividend-paying reliability and capital management. The recommendation is positive, especially for income-focused investors seeking a blend of moderate yield and robust financial health.
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