April 21, 2025 a 02:46 am
MPWR: Dividend Analysis - Monolithic Power Systems, Inc.
Monolithic Power Systems, Inc. (MPWR) presents a compelling profile for dividend investors, characterized by consistent dividend growth and a strong balance sheet. With a solid history of dividend payments extending over 13 years and recent dividend growth rates indicative of steady increases, MPWR offers both income and potential for capital appreciation. However, its relatively low dividend yield suggests a focus on long-term growth rather than immediate income returns.
📊 Overview
Monolithic Power Systems operates within the technological sector, which typically emphasizes growth over high dividend yields. The company's current dividend yield stands at 0.92%, with a robust current dividend per share of $4.95, supported by 13 years of uninterrupted dividend history.
| Metric | Value |
|---|---|
| Sector | Technology |
| Dividend Yield | 0.92% |
| Current Dividend per Share | $4.95 |
| Dividend History | 13 years |
| Last Cut or Suspension | None |
🗣️ Dividend History
The dividend history of MPWR is a testament to its commitment to returning capital to shareholders. The stability in dividend payments is crucial for income investors, as it establishes trust and reliance on steady returns. The absence of dividend cuts or suspensions over 13 years underscores this resilience.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 1.56 |
| 2024 | 5.00 |
| 2023 | 4.00 |
| 2022 | 3.00 |
| 2021 | 2.4 |
📈 Dividend Growth
Understanding dividend growth is essential as it reflects the company's ability to increase shareholder returns. MPWR shows a three-year dividend growth rate of 27.72%, and a five-year growth rate of 25.59%. Such growth rates signal the company's robust financial health and its capacity to enhance dividends.
| Time | Growth |
|---|---|
| 3 years | 27.72% |
| 5 years | 25.59% |
The average dividend growth is 25.59% over 5 years. This shows moderate but steady dividend growth.
✅ Payout Ratio
The payout ratio is a financial metric demonstrating the proportion of earnings paid to shareholders in dividends. MPWR's EPS-based payout ratio is a conservative 13.44%, while the free cash flow-based payout ratio stands at 36.90%. These metrics illustrate MPWR's prudent approach to maintaining a strong reserve to fuel growth while rewarding shareholders.
| Key Figure | Ratio |
|---|---|
| EPS-based | 13.44% |
| Free Cash Flow-based | 36.90% |
A lower payout ratio suggests a strong reinvestment into the firm's growth, while still providing returns to shareholders.
📈 Cashflow & Capital Efficiency
Cash flow strength and capital efficiency are critical for sustaining dividends and investing in growth. The free cash flow yield, earnings yield, and other efficiency metrics provide insight into MPWR’s ability to manage resources effectively.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 2.23% | 1.93% | 1.14% |
| Earnings Yield | 6.21% | 1.42% | 2.65% |
| CAPEX to Operating Cash Flow | 18.53% | 9.02% | 23.85% |
| Stock-based Compensation to Revenue | 9.31% | 8.22% | 8.97% |
| Free Cash Flow / Operating Cash Flow Ratio | 81.47% | 90.98% | 76.15% |
MPWR demonstrates solid cash flow health with an impressive free cash flow yield, underscoring its ability to sustain dividends and invest in strategic growth initiatives.
⚠️ Balance Sheet & Leverage Analysis
Analyzing the balance sheet and leverage ratios provides insights into MPWR's financial health. With low debt ratios and high liquidity, the company is well-positioned to weather market volatility.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 0 | 0.27% | 0.23% |
| Debt-to-Assets | 0 | 0.23% | 0.18% |
| Debt-to-Capital | 0 | 0.27% | 0.23% |
| Net Debt to EBITDA | -1.20 | -1.00 | -0.51 |
| Current Ratio | 5.31 | 7.74 | 5.35 |
| Quick Ratio | 3.89 | 6.11 | 3.66 |
| Financial Leverage | 1.15 | 1.19 | 1.23 |
Overall, MPWR's financial stability is evidenced by strong liquidity and minimal leverage, indicating resilience against potential financial downturns.
🗂️ Fundamental Strength & Profitability
Evaluating MPWR's profitability metrics such as return on equity and asset returns reflect the efficiency of capital utilization, an important indicator of sustainable growth potential.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 56.80% | 20.85% | 26.23% |
| Return on Assets | 49.40% | 17.56% | 21.26% |
| Margins: Net | 80.95% | 23.47% | 24.39% |
| EBIT Margin | 24.44% | 26.45% | 29.36% |
| EBITDA Margin | 26.09% | 28.66% | 31.43% |
| Gross Margin | 55.32% | 56.07% | 58.44% |
| R&D to Revenue | 14.71% | 14.48% | 13.39% |
MPWR exhibits strong fundamental metrics, reinforcing its potential for sustained profitability and shareholder returns.
📈 Price Development
📊 Dividend Scoring System
| Criteria | Score | Score Bar |
|---|---|---|
| Dividend Yield | 3 | |
| Dividend Stability | 5 | |
| Dividend Growth | 4 | |
| Payout Ratio | 5 | |
| Financial Stability | 5 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 5 |
Total Score: 36 / 40
🏆 Rating
Monolithic Power Systems, Inc. receives a robust dividend rating. With exceptional stability in dividend payments, impressive growth rates, and a sound financial structure, it stands as a commendable choice for investors seeking reliable income aligned with growth potential. The company's prudent financial management enhances its capacity to return value to shareholders, ensuring a stable investment outlook.