April 14, 2025 a 02:46 am
KR: Dividend Analysis - The Kroger Co.
The Kroger Co. demonstrates a strong history in delivering dividends, supported by 39 consecutive years of dividend payments. With a current dividend yield of 1.88% and a disciplined payout ratio, the company is positioned as a reliable income provider. However, moderate growth in dividends suggests room for improvement in enhancing shareholder value in the long term.
📊 Overview
The Kroger Co. operates primarily in the Retail Grocery sector, globally recognized for its dividend reliability. Below is a snapshot of its current dividend profile:
| Category | Details |
|---|---|
| Sector | Retail Grocery |
| Dividend Yield | 1.88% |
| Current Dividend per Share | $1.22 |
| Dividend History | 39 years |
| Last Cut or Suspension | None |
📉 Dividend History
Analyzing the historical dividend data is crucial as it reflects the company's commitment to returning value to shareholders. Long-term stability in distributions often indicates robust underlying business health.
| Year | Dividend Per Share (USD) |
|---|---|
| 2025 | 0.64 |
| 2024 | 1.22 |
| 2023 | 1.10 |
| 2022 | 0.94 |
| 2021 | 0.78 |
📈 Dividend Growth
The trajectory of dividend growth over time shows the company's ability to increase shareholder returns, which is pivotal for assessing future income potential.
| Time | Growth |
|---|---|
| 3 years | 16.08% |
| 5 years | 15.25% |
The average dividend growth is 15.25% over 5 years. This shows moderate but steady dividend growth.
✅ Payout Ratio
Payout ratios indicate the sustainability of dividend payments by showing what portion of earnings and cash flow is distributed to shareholders. A disciplined payout ratio suggests potential for future dividend increases and capital reinvestment.
| Key Figure | Ratio |
|---|---|
| EPS-based | 32.14% |
| Free cash flow-based | 44.95% |
The EPS payout ratio of 32.14% and the FCF payout ratio of 44.95% suggest that dividends are comfortably covered by earnings and free cash flow.
🔍 Cashflow & Capital Efficiency
Cashflow metrics are essential for understanding the company's ability to generate free cash to support dividends. Alongside capital efficiency measures, they provide insights into financial health and operational sustainability.
| Key Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 3.97% | 8.71% | 3.81% |
| Earnings Yield | 5.95% | 6.53% | 6.94% |
| CAPEX to Operating Cash Flow | 69.30% | 57.51% | 71.40% |
| Stock-based Compensation to Revenue | 0.12% | 0.11% | 0.13% |
| Free Cash Flow / Operating Cash Flow Ratio | 30.67% | 42.49% | 28.60% |
The stable free cash flow yield and efficient capital management indicate a robust capacity to generate excess cash, vital for dividend sustainability.
🗣️ Balance Sheet & Leverage Analysis
A strong balance sheet with manageable debt levels and good liquidity is vital for a company, ensuring it can withstand financial stress and continue paying dividends.
| Key Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 3.03 | 1.66 | 2.04 |
| Debt-to-Assets | 0.48 | 0.38 | 0.41 |
| Debt-to-Capital | 0.75 | 0.62 | 0.67 |
| Net Debt to EBITDA | 3.21 | 2.47 | 2.79 |
| Current Ratio | 0.96 | 0.81 | 0.76 |
| Quick Ratio | 0.52 | 0.36 | 0.30 |
| Financial Leverage | 6.35 | 4.35 | 4.95 |
The current leverage indicates high debt levels, which could constrain flexibility but are balanced by sufficient earnings coverage.
💡 Fundamental Strength & Profitability
High returns on equity and assets coupled with healthy profit margins are indicators of efficient management and a solid business model.
| Key Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 32.18% | 18.63% | 22.41% |
| Return on Assets | 5.06% | 4.28% | 4.53% |
| Net Margin | 1.81% | 1.44% | 1.51% |
| EBIT Margin | 3.07% | 2.18% | 2.32% |
| EBITDA Margin | 5.19% | 4.69% | 4.74% |
| Gross Margin | 22.70% | 20.15% | 21.43% |
| R&D to Revenue | 0% | 0% | 0% |
Despite strong profitability metrics and operational efficiency, a lack of R&D spending raises questions about long-term innovation capabilities.
📈 Price Development
📊 Dividend Scoring System
| Category | Score | |
|---|---|---|
| Dividend Yield | 3 | |
| Dividend Stability | 5 | |
| Dividend Growth | 3 | |
| Payout Ratio | 4 | |
| Financial Stability | 4 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 3 |
Total Score: 31/40
🗣️ Rating
The Kroger Co. presents a strong dividend profile characterized by stable delivery and capable financial management. While its moderate dividend yield and growth rate leave room for enhancement, its consistent payments and solid payout ratios ensure reliability. Investors seeking steady income with moderate growth potential may find Kroger's dividends appealing, despite potential concerns over leverage and innovation capacity.