December 24, 2025 a 02:46 am
LW: Dividend Analysis - Lamb Weston Holdings, Inc.
The dividend profile of Lamb Weston Holdings, Inc. illustrates a stable yet dynamically evolving financial stature, where the company has upheld a noteworthy dividend history over the last decade. Despite a challenging fiscal environment, the firm has managed to sustain an impressive dividend yield, underscoring its commitment to returning value to shareholders.
📊 Overview
The company's performance in the sector remains robust, marked by its strong dividend yield and consistent payout history over the years.
| Sector | Dividend Yield | Current Dividend per Share | Dividend History | Last Cut or Suspension |
|---|---|---|---|---|
| Consumer Staples | 3.50% | $1.45 | 10 years | 2026 |
🗣️ Dividend History
Over the past five years, Lamb Weston Holdings, Inc. has shown resilience in maintaining and progressively improving its dividend payouts, indicating a solid commitment to enhancing shareholder wealth.
| Year | Dividend per Share (USD) |
|---|---|
| 2026 | 0.38 |
| 2025 | 1.48 |
| 2024 | 1.44 |
| 2023 | 1.12 |
| 2022 | 0.98 |
📈 Dividend Growth
Dividend growth is a critical indicator of a company's ability to enhance shareholder value over time. Lamb Weston Holdings, Inc. demonstrates a respectable dividend growth trajectory.
| Time | Growth |
|---|---|
| 3 years | 15.28% |
| 5 years | 12.47% |
The average dividend growth is 12.47% over 5 years. This shows moderate but steady dividend growth.
✅ Payout Ratio
The payout ratio is integral in assessing the sustainability of dividends. Lamb Weston Holdings, Inc. maintains a cautious approach, striking a balance between rewarding shareholders and reinvesting in growth opportunities.
| Key Figure Ratio | Percentage |
|---|---|
| EPS-based | 51.70% |
| Free cash flow-based | 40.54% |
The EPS-based payout ratio of 51.70% indicates a prudent dividend policy, ensuring long-term sustainability, while the FCF-based ratio of 40.54% highlights a strong coverage of dividends by free cash flows.
🏗️ Cashflow & Capital Efficiency
Strong cash flow generation and effective capital allocation are paramount for a company's financial health and ability to sustain dividends.
| Year | 2025 | 2024 | 2023 |
|---|---|---|---|
| Free Cash Flow Yield | 2.90% | -1.03% | 0.67% |
| Earnings Yield | 4.50% | 5.67% | 6.28% |
| CAPEX to Operating Cash Flow | 73.50% | 116.45% | 85.86% |
| Stock-based Compensation to Revenue | 0.61% | 0.72% | 0.72% |
| Free Cash Flow / Operating Cash Flow Ratio | 26.50% | -16.45% | 14.14% |
The stable free cash flow yield coupled with efficient capital management underpins the firm's operational robustness and its capacity to maintain dividend commitments.
🔍 Balance Sheet & Leverage Analysis
A robust balance sheet ensures financial stability and reduces risk associated with leverage.
| Year | 2025 | 2024 | 2023 |
|---|---|---|---|
| Debt-to-Equity | 2.39 | 2.15 | 2.47 |
| Debt-to-Assets | 56.21% | 52.30% | 53.54% |
| Debt-to-Capital | 70.51% | 68.30% | 71.21% |
| Net Debt to EBITDA | 3.75 | 2.76 | 2.88 |
| Current Ratio | 1.38 | 1.29 | 1.56 |
| Quick Ratio | 0.68 | 0.59 | 0.88 |
| Financial Leverage | 4.25 | 4.12 | 4.62 |
The analysis of leverage ratios reflects a well-capitalized structure, indicating a strong position to withstand financial strains while supporting growth initiatives.
💼 Fundamental Strength & Profitability
Profitability metrics like return on equity and margins provide insights into the effectiveness of management and the company's competitive advantage.
| Year | 2025 | 2024 | 2023 |
|---|---|---|---|
| Return on Equity | 20.56% | 40.58% | 71.49% |
| Return on Assets | 4.83% | 9.85% | 15.47% |
| Net Profit Margin | 5.54% | 11.22% | 18.86% |
| EBIT Margin | 10.31% | 16.47% | 16.49% |
| EBITDA Margin | 16.63% | 21.21% | 20.65% |
| Gross Profit Margin | 21.68% | 27.32% | 26.77% |
| R&D to Revenue | 0% | 0% | 0% |
The high return on equity showcases Lamb Weston's capacity to efficiently reinvest earnings to generate further growth, sustaining superior profitability margins.
📉 Price Development
⭐ Dividend Scoring System
| Category | Score | Score Bar |
|---|---|---|
| Dividend Yield | 4 | |
| Dividend Stability | 4 | |
| Dividend Growth | 3 | |
| Payout Ratio | 3 | |
| Financial Stability | 3 | |
| Dividend Continuity | 4 | |
| Cashflow Coverage | 3 | |
| Balance Sheet Quality | 3 |
Total Score: 27/40
🔍 Rating
Lamb Weston Holdings, Inc. maintains an impressive dividend profile with a commendable yield and a stable payout history. Despite a relatively high leverage, its strong cash flows and sound profitability metrics indicate a resilient financial structure. The company's commitment to shareholder value is evident, lending it an above-average score in the dividend scoring system. It is recommended for income-focused investors seeking steady growth potential.