May 31, 2025 a 07:46 am
IFF: Dividend Analysis - International Flavors & Fragrances Inc.
International Flavors & Fragrances Inc. (IFF) boasts a longstanding history of consistent dividend payments, demonstrating a robust commitment to returning capital to shareholders. With a current dividend yield of approximately 2.09%, the company provides an attractive income stream for investors. However, recent challenges in maintaining dividend growth highlight the importance of evaluating IFF's financial health comprehensively. This analysis delves into the firm's dividend profile, financial ratios, and overall financial stability to furnish investors with a thorough understanding of its dividend sustainability.
📊 Overview
International Flavors & Fragrances Inc., operating in the Flavors and Fragrances sector, highlights its solidity through an extensive dividend-paying history spanning over 52 years. Despite a recent stall in dividend increments, the current dividend per share stands at $2.00 USD, offering a commendable yield of approximately 2.09%.
| Factor | Data |
|---|---|
| Sector | Flavors and Fragrances |
| Dividend Yield | 2.09 % |
| Current Dividend Per Share | 2.00 USD |
| Dividend History (years) | 52 years |
| Last Cut or Suspension | None |
🗣️ Dividend History
The historical analysis of dividends reveals a steady commitment to shareholder returns but identifies recent fluctuations in payment consistency. Monitoring these dynamics is vital for assessing the sustainability and predictability of the firm's dividend strategy.
| Year | Dividend Per Share (USD) |
|---|---|
| 2025 | 0.80 |
| 2024 | 1.60 |
| 2023 | 3.24 |
| 2022 | 3.20 |
| 2021 | 3.12 |
📈 Dividend Growth
Dividend growth analysis is crucial for assessing IFF's ability to increase shareholder value over time. Recent data indicates a decline with a three-year growth rate of -0.20% and a five-year growth rate of -0.12%.
| Time | Growth |
|---|---|
| 3 years | -0.20 % |
| 5 years | -0.12 % |
The average dividend growth is -0.12% over 5 years. This shows a concerning trend of dividend contraction, urging closer financial scrutiny.
📉 Payout Ratio
Payout ratios provide insights into the sustainability of dividend payments. IFF exhibits a notable EPS-based payout ratio of -61.56% and a free cash flow-based payout ratio of 90.26%. The negative EPS-based figure reflects earnings challenges, while the FCF-based ratio indicates a high consumption of available cash flow for dividend servicing.
| Key Figure | Ratio |
|---|---|
| EPS-based | -61.56 % |
| Free Cash Flow-based | 90.26 % |
A negative EPS-based payout ratio reflects operational profitability struggles, whereas the elevated FCF ratio highlights considerable cash allocations, necessitating a cautious outlook.
✅ Cashflow & Capital Efficiency
Cash flow and capital efficiency metrics are pivotal for understanding IFF's operational effectiveness and investment quality.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 0.028 | 0.045 | -0.006 |
| CAPEX to Operating Cash Flow | 0.433 | 0.350 | 1.467 |
| Stock-based Compensation to Revenue | 0.0068 | 0.0057 | 0.0039 |
| Free Cash Flow / Operating Cash Flow Ratio | 0.567 | 0.650 | -0.467 |
These cash flow metrics indicate recent volatility and emphasize the necessity for strategic financial management to bolster capital efficiency.
🔍 Balance Sheet & Leverage Analysis
Analyzing leverage and liquidity ratios helps assess IFF's financial resilience and debt management capabilities.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 0.691 | 0.739 | 0.619 |
| Debt-to-Assets | 0.335 | 0.349 | 0.310 |
| Net Debt to EBITDA | 5.710 | -10.136 | -95.245 |
| Current Ratio | 1.845 | 1.675 | 1.988 |
IFF exhibits a balanced debt structure with adequate liquidity, although fluctuating leverage ratios may pose potential financial risks.
⚖️ Fundamental Strength & Profitability
Evaluating profitability metrics is essential for understanding the firm’s ability to generate returns and maintain competitive margins.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 1.75 % | -17.55 % | -10.35 % |
| Return on Assets | 0.85 % | -8.28 % | -5.19 % |
| Net Margin | 2.12 % | -22.35 % | -14.76 % |
The profitability metrics reflect ongoing challenges, necessitating strategic initiatives to bolster profitability and shareholder returns.
📈 Price Development
🎯 Dividend Scoring System
Evaluating IFF's dividend through an encompassing scoring system highlights strengths and areas for improvement.
| Category | Score | Grade |
|---|---|---|
| Dividend Yield | 2 | |
| Dividend Stability | 3 | |
| Dividend Growth | 1 | |
| Payout Ratio | 2 | |
| Financial Stability | 3 | |
| Dividend Continuity | 4 | |
| Cashflow Coverage | 2 | |
| Balance Sheet Quality | 3 |
Total Score: 20/40
⭐ Rating
International Flavors & Fragrances Inc. presents a mixed dividend prospect with commendable history and yield but exhibits crucial challenges in dividend growth and financial performance stability. Investors must weigh these factors and consider the potential volatility before long-term commitment, though the company's robust historical payout track adds a layer of reliability. A cautious "Hold" is recommended.