July 24, 2025 a 07:46 am
MOS: Dividend Analysis - The Mosaic Company
The Mosaic Company showcases a strong dividend profile underpinned by a respectable yield and several decades of consistent payouts. Despite concerns around the elevated payout ratios, the company's long-standing dividend track record is commendable. Continued focus on maintaining financial stability will be crucial to uphold dividend sustainability.
Overview 📊
Mosaic operates within the sector, delivering a dividend yield of 2.36%. The current dividend per share stands at 0.85 USD, signifying steady income potential across its 34-year dividend history. While no recent cuts or suspensions have occurred, vigilance on financial health is paramount.
| Metric | Value |
|---|---|
| Sector | Basic Materials |
| Dividend yield | 2.36% |
| Current dividend per share | 0.85 USD |
| Dividend history | 34 years |
| Last cut or suspension | None |
Dividend History 🗣️
Mosaic's robust dividend history reflects a commitment to shareholder returns, having distributed dividends for 34 years. This stability is integral for income-focused investors looking for consistent payouts.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 0.44 |
| 2024 | 0.84 |
| 2023 | 1.05 |
| 2022 | 0.56 |
| 2021 | 0.275 |
Dividend Growth 📈
The recent modest growth in dividends highlights a measured approach to enhancing shareholder returns, with 5-year growth at 36.85%. This showcases moderate but steady dividend growth, crucial for long-term investors.
| Time | Growth |
|---|---|
| 3 years | 45.09% |
| 5 years | 36.85% |
The average dividend growth is 36.85% over 5 years. This shows moderate but steady dividend growth.
Payout Ratio 📉
Understanding payout ratios is crucial as they reflect the proportion of earnings paid out as dividends, affecting sustainability. With an EPS-based payout of 73% and an FCF-based ratio of 126%, it indicates pressure on free cash flow to cover dividends, necessitating prudent financial management.
| Key figure | Ratio |
|---|---|
| EPS-based | 73% |
| Free cash flow-based | 126% |
This high payout ratio suggests potential challenges in sustaining dividends solely from current earnings, urging caution and monitoring of cash flow health.
Cashflow & Capital Efficiency 📊
Evaluating cash flow dynamics and capital allocation efficiencies are pivotal for maintaining dividend payouts and corporate stability. The following figures capture these nuances:
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 0.60% | 8.49% | 17.39% |
| Earnings Yield | 2.22% | 9.84% | 23.17% |
| CAPEX to Operating Cash Flow | 85.06% | 58.26% | 31.69% |
| Stock-based Compensation to Revenue | 0.24% | 0.28% | 0.15% |
| Free Cash Flow / Operating Cash Flow Ratio | 3.65% | 41.74% | 68.31% |
The visible decline in free cash flow yield from 2022 to 2024 urges closer scrutiny of cash management strategies, crucial for dividend cover determination.
Balance Sheet & Leverage Analysis ⚠️
Analyzing leverage and liquidity ratios allows for insights into financial health and the ability to sustain operations while supporting shareholder returns.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 0.39 | 0.33 | 0.30 |
| Debt-to-Assets | 0.19 | 0.17 | 0.15 |
| Debt-to-Capital | 0.28 | 0.25 | 0.23 |
| Net Debt to EBITDA | 2.66 | 1.42 | 0.60 |
| Current Ratio | 1.08 | 1.22 | 1.18 |
| Quick Ratio | 0.47 | 0.57 | 0.54 |
| Financial Leverage | 2.00 | 1.87 | 1.94 |
The notable increase in net debt to EBITDA from 0.60 in 2022 to 2.66 in 2024 suggests rising leverage, requiring diligent debt management to mitigate financial risks.
Fundamental Strength & Profitability 📊
Fundamental metrics, including return ratios and margins, offer insights into overall profitability and operational efficiency:
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 1.52% | 9.48% | 29.72% |
| Return on Assets | 0.76% | 5.06% | 15.32% |
| Net Margin | 1.57% | 8.51% | 18.73% |
| EBIT Margin | 4.90% | 11.06% | 25.02% |
| EBITDA Margin | 14.12% | 18.78% | 25.02% |
| Gross Margin | 13.59% | 16.14% | 30.10% |
| Research & Development to Revenue | 0% | 0% | 0% |
The decline in return on equity from 29.72% in 2022 to 1.52% in 2024 underlines challenges in profitability, necessitating a strategic re-evaluation to harness operational efficiencies.
Price Development 📈
Dividend Scoring System ✅
Evaluating on multiple facets, Mosaic's dividend proposition is encapsulated through the following scorecard:
| Criteria | Score | |
|---|---|---|
| Dividend yield | 3 | |
| Dividend Stability | 4 | |
| Dividend growth | 3 | |
| Payout ratio | 2 | |
| Financial stability | 3 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 2 | |
| Balance Sheet Quality | 3 |
Total Score: 25/40
Rating ⚠️
With a comprehensive assessment, Mosaic presents a suitable, though cautious, investment opportunity in dividend-focused portfolios. Retaining vigilance on dividend payout and financial health will be pivotal for long-term sustainability and investor reassurances.