April 12, 2025 a 02:46 am
IR: Dividend Analysis - Ingersoll Rand Inc.
Ingersoll Rand Inc. presents a modest dividend profile, characterized by a low dividend yield but stable payout history. Despite recent volatility in growth percentages, the company's low payout ratios suggest a conservative approach, prioritizing financial resilience and reinvestment. However, potential investors should weigh the historical reductions in dividend growth against the firm's robust financial stability and low debt levels.
📊 Overview
Ingersoll Rand Inc. operates within a dynamic sector, maintaining a conservative dividend yield strategy reflective of its emphasis on sustainable financial growth and reinvestment. The company's dividend history and current metrics are crucial for evaluating its fiscal approach and shareholder return expectations.
| Metric | Value |
|---|---|
| Sector | Industrials |
| Dividend yield | 0.10 % |
| Current dividend per share | 0.08 USD |
| Dividend history | 9 years |
| Last cut or suspension | None |
🗣️ Dividend History
The dividend history of Ingersoll Rand highlights its commitment to returning value to shareholders with consistent payments over the past years, although there have been fluctuations. Monitoring such patterns can be instrumental in understanding the company's responsiveness to market conditions.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 0.02 |
| 2024 | 0.08 |
| 2023 | 0.08 |
| 2022 | 0.08 |
| 2021 | 0.02 |
📈 Dividend Growth
Understanding dividend growth is crucial for assessing the potential for income increases over time. While the 5-year growth is negative, the 3-year growth displays a positive upward trend, indicating recovery efforts from the company.
| Time | Growth |
|---|---|
| 3 years | 0.59 % |
| 5 years | -0.48 % |
The average dividend growth is -0.48 % over 5 years. This shows a negative trend requiring careful monitoring.
📉 Payout Ratio
The payout ratios are pivotal in assessing fiscal discipline and capital allocation strategies. With significantly low payout ratios, Ingersoll Rand demonstrates substantial earnings retention for reinvestment or debt reduction.
| Key figure | Ratio |
|---|---|
| EPS-based | 3.85 % |
| Free cash flow-based | 2.47 % |
With an EPS-based payout ratio of 3.85 % and a FCF-based payout ratio of 2.47 %, the company portrays a strong capacity to maintain its dividends, supporting potential stability and future dividend hikes.
✅ Cashflow & Capital Efficiency
Assessing cash flow and capital efficiency unveils the company's operational prowess and ability to sustain its dividend and operational growth strategies robustly.
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Free Cash Flow Yield | 3.62 % | 4.06 % | 3.42 % |
| Earnings Yield | 2.85 % | 2.49 % | 2.30 % |
| CAPEX to Operating Cash Flow | 10.99 % | 7.65 % | 6.42 % |
| Stock-based Compensation to Revenue | 1.33 % | 0.75 % | 0.81 % |
| Free Cash Flow / Operating Cash Flow Ratio | 89.00 % | 92.35 % | 89.32 % |
The stability in free cash flow and capital structure underscores the firm's competent financial management and commitment to maintaining capital efficiency while pursuing growth.
⚠️ Balance Sheet & Leverage Analysis
Reviewing Ingersoll Rand's balance sheet gives insights into its financial health and risk management approaches. The company's low debt ratios suggest prudent leveraging strategies.
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Debt-to-Equity | 0.03 | 28.26 | 0.03 |
| Debt-to-Assets | 0.02 | 17.77 | 0.02 |
| Debt-to-Capital | 0.03 | 22.04 | 0.03 |
| Net Debt to EBITDA | -0.80 | 0.71 | -0.84 |
| Current Ratio | 2.37 | 2.22 | 2.29 |
| Quick Ratio | 1.76 | 1.67 | 1.71 |
| Financial Leverage | 1.61 | 1.59 | 1.77 |
The company's favorable liquidity ratios and low leverage indicate strong financial health and low exposure to financial distress risks.
📊 Fundamental Strength & Profitability
Ingersoll Rand's profitability ratios reveal its capability to generate earnings relative to equity, assets, and invested capital, pointing to effective operational management.
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Return on Equity | 6.58 % | 7.96 % | 8.24 % |
| Return on Assets | 4.10 % | 5.00 % | 4.66 % |
| Margins: Net | 10.22 % | 11.32 % | 11.59 % |
| Margins: EBIT | 14.29 % | 17.27 % | 18.60 % |
| Margins: EBITDA | 22.18 % | 23.95 % | 25.27 % |
| Margins: Gross | 39.31 % | 41.92 % | 43.81 % |
| Research & Development to Revenue | 0.00 % | 1.57 % | 1.57 % |
The consistent profitability margins and returns highlight the company’s strategic emphasis on cost management and innovative growth initiatives.
📈 Price Development
📊 Dividend Scoring System
| Criterion | Description | Score |
|---|---|---|
| Dividend yield | Moderate | |
| Dividend Stability | High | |
| Dividend growth | Negative | |
| Payout ratio | Very Low | |
| Financial stability | Robust | |
| Dividend continuity | Strong | |
| Cashflow Coverage | Sufficient | |
| Balance Sheet Quality | Excellent |
Total Score: 27 out of 40 points
🗣️ Rating
Ingersoll Rand Inc. exhibits strong financial health, characterized by a solid balance sheet and attention to cash flow efficiency. While the dividend growth trajectory remains a concern, the company's modest yield and disciplined payout strategy instill confidence in its ability to sustain and possibly enhance returns. Investment consideration is advised for those prioritizing financial stability over immediate high yields.