November 16, 2025 a 07:31 am
IPG: Dividend Analysis - The Interpublic Group of Companies, Inc.
The Interpublic Group of Companies, Inc. stands out with a robust dividend yield of 5.02%, paired with a consistent 31-year dividend payment history. However, the elevated EPS payout ratio of 110.22% and moderate growth rate demand careful scrutiny for sustaining strong investor confidence.
📊 Overview
The overview of dividend metrics provides key insights into the company's dividend-paying capabilities and reliability, which are vital for income-focused investors.
| Detail | Value |
|---|---|
| Sector | Advertising & Marketing |
| Dividend yield | 5.02% |
| Current dividend per share | 1.32 USD |
| Dividend history | 31 years |
| Last cut or suspension | None |
🗣️ Dividend History
Analyzing dividend history reveals the firm's track record in sustaining and growing shareholder returns. This is crucial for assessing future payout predictability.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 0.99 |
| 2024 | 1.32 |
| 2023 | 1.24 |
| 2022 | 1.16 |
| 2021 | 1.08 |
📈 Dividend Growth
Dividend growth evaluates the company's ability to increase its payouts over time, which is an indicator of its financial health and operational success.
| Time | Growth |
|---|---|
| 3 years | 6.92% |
| 5 years | 7.03% |
The average dividend growth is 7.03% over 5 years. This shows moderate but steady dividend growth.
📉 Payout Ratio
The payout ratio illustrates how much of the company's earnings and cash flow are returned to shareholders via dividends, critical for appraising dividend sustainability.
| Key figure | Ratio |
|---|---|
| EPS-based | 110.22% |
| Free cash flow-based | 57.26% |
With an EPS payout ratio of 110.22%, the dividend is unsustainably high unless earnings grow significantly, while the FCF ratio of 57.26% indicates a more manageable payout relative to cash generation.
✅ Cashflow & Capital Efficiency
Assessing cash flow and capital efficiency metrics offers insights into a firm's operational dynamics and its ability to maintain dividends through various economic cycles.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 8.69% | 2.99% | 3.30% |
| Earnings Yield | 6.56% | 8.76% | 7.19% |
| CAPEX to Operating Cash Flow | 13.44% | 32.32% | 29.25% |
| Stock-based Compensation to Revenue | 0.61% | 0.43% | 0.46% |
| Free Cash Flow / Operating Cash Flow Ratio | 86.56% | 67.68% | 70.75% |
The stability in free cash flow and efficient capital allocation underscores effective operational management, supporting satisfactory due diligence for dividend coverage.
🗣️ Balance Sheet & Leverage Analysis
Balance sheet and leverage analysis provide insights into the company's financial structure, debt management, and overall financial health.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 1.12 | 1.18 | 1.24 |
| Debt-to-Assets | 23.22% | 24.24% | 24.05% |
| Debt-to-Capital | 52.84% | 54.23% | 55.40% |
| Net Debt to EBITDA | 1.34 | 1.20 | 1.16 |
| Current Ratio | 1.09 | 1.06 | 1.03 |
| Quick Ratio | 1.09 | 1.06 | 1.03 |
| Financial Leverage | 4.83 | 4.89 | 5.17 |
The increasing debt ratios suggest potential financial risk, while maintaining a sound liquidity profile moderately alleviates balance sheet concerns.
📊 Fundamental Strength & Profitability
Delving into fundamental strength and profitability measures the company's effectiveness in utilizing its resources for growth and sustaining dividends.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 18.16% | 27.86% | 25.71% |
| Return on Assets | 3.76% | 5.70% | 4.98% |
| Net Margin | 6.45% | 10.09% | 8.58% |
| EBIT Margin | 11.96% | 15.00% | 13.15% |
| EBITDA Margin | 14.38% | 17.43% | 15.66% |
| Gross Margin | 17.02% | 16.66% | 16.88% |
| Research & Development to Revenue | 0% | 0% | 0% |
The strong returns indicate the firm's profitability, though the absence of R&D expenditure might affect future innovation and competitive edge.
Price Development
Dividend Scoring System
| Criteria | Description | Score |
|---|---|---|
| Dividend yield | 5.02% provides attractive income | |
| Dividend Stability | 31 years of continuous dividends | |
| Dividend growth | Modest growth over 5 years | |
| Payout ratio | EPS payout is over 100% | |
| Financial stability | Sound but highly leveraged | |
| Dividend continuity | No past cuts, solid history | |
| Cashflow Coverage | Free cash flow covers dividends | |
| Balance Sheet Quality | Leveraged with moderate liquidity |
Total Score: 35/40
Rating
The Interpublic Group of Companies, Inc. demonstrates strong dividend reliability with a historically high yield and notable stability. However, high payout ratios and leverage present risks. Recommended for experienced investors seeking income with an appetite for underlying volatility.