April 17, 2025 a 03:31 pm
ORCL: Dividend Analysis - Oracle Corporation
Oracle Corporation presents an intriguing dividend profile characterized by consistent payout strategies and moderate growth associated with stable financial frameworks. As a prominent entity in the technology sector, Oracle's dividends reflect both stability and a strategic outlook that ensures shareholder returns amidst evolving market dynamics. The following analysis delves into core financial metrics and strategic positions that underscore Oracle's current dividend proposition.
Overview 📊
Oracle, positioned within the Technology sector, maintains a dividend yield of 1.27%. The current dividend stands at $1.60 USD per share, marking a robust dividend history spanning 17 years with no recent cuts or suspensions. This steadfast dividend model provides Oracle with a resilient market stance, attracting investors favoring predictable income returns.
| Metric | Value |
|---|---|
| Sector | Technology |
| Dividend yield | 1.27% |
| Current dividend per share | 1.60 USD |
| Dividend history | 17 years |
| Last cut or suspension | None |
Dividend History 📜
The continuity of Oracle's dividend payments underscores its commitment to shareholder returns, providing a stable income stream that spans over a decade. Despite market fluctuations, the company has fortified its credibility with consistent payout regimes. Such historical patterns significantly bolster investor confidence and the perceived valuation of the company.
| Year | Dividend Per Share (USD) |
|---|---|
| 2025 | 0.9 |
| 2024 | 1.6 |
| 2023 | 1.52 |
| 2022 | 1.28 |
| 2021 | 1.20 |
Dividend Growth 📈
Analyzing Oracle's dividend growth offers insight into the company's expansion and capital allocation strategies. With a 3-year growth rate of 0.10% and a 5-year growth rate of 0.11%, Oracle exhibits a path of measured yet reliable growth, reflecting a balanced approach to enhancing shareholder value alongside operational scaling.
| Time | Growth |
|---|---|
| 3 years | 0.10% |
| 5 years | 0.11% |
The average dividend growth is 0.11% over 5 years. This shows moderate but steady dividend growth, aligning with Oracle's strategic emphasis on maintaining sustainable and reliable shareholder returns.
Payout Ratio 🗣️
The payout ratios are pivotal in understanding the sustainability of dividend payments. Oracle's EPS-based payout ratio stands at 37.88%, and its Free Cash Flow-based ratio is at 77.21%. This divergence indicates prudent management in maintaining dividend affordability while leveraging operational cash flows for reinvestment and growth.
| Key figure | Ratio |
|---|---|
| EPS-based | 37.88% |
| Free cash flow-based | 77.21% |
The EPS payout ratio of 37.88% is well within acceptable limits, suggesting room for future dividend increases. Conversely, the FCF payout ratio of 77.21% may indicate limitations in cash flow leverage, which necessitates vigilant operational efficiency improvements.
Cashflow & Capital Efficiency ⚖️
A thorough analysis of cash flow and capital efficiency highlights Oracle's proficiency in managing its financial resources. The metrics showcase the strategic balance between free cash flow, earnings yield, and capital expenditures, underscoring a structured approach towards capital reinvestment and shareholder returns.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 3.67% | 2.97% | 2.59% |
| Earnings Yield | 3.25% | 2.98% | 3.46% |
| CAPEX to Operating Cash Flow | 36.77% | 50.66% | 47.29% |
| Stock-based Compensation to Revenue | 7.50% | 7.10% | 6.16% |
| Free Cash Flow / Operating Cash Flow Ratio | 63.23% | 49.34% | 52.71% |
The analysis elucidates Oracle's focus on sustaining robust cash flows with significant capital expenditure ratios reflecting investment in growth. This strategy fortifies long-term financial health and capital efficiency, albeit necessitating careful management to sustain dividend consistency.
Balance Sheet & Leverage Analysis 💼
Oracle's leverage metrics and balance sheet ratios delineate its financial stability and debt management strategy. These ratios are crucial for assessing the company's ability to service its debt obligations while maintaining operational liquidity.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 10.85 | 58.15 | -13.15 |
| Debt-to-Assets | 0.67 | 0.67 | 0.69 |
| Debt-to-Capital | 0.92 | 0.98 | 1.08 |
| Net Debt to EBITDA | 3.89 | 4.27 | 2.87 |
| Current Ratio | 1.01 | 0.91 | 1.62 |
| Quick Ratio | 0.70 | 0.90 | 1.61 |
| Financial Leverage | 16.20 | 86.37 | -18.95 |
These metrics reveal a complex but structured debt profile, with Debt-to-Equity ratios indicating deliberate leverage strategies. While financial leverage appears significant, it coincides with strategic growth initiatives supported by strong EBITDA linkages.
Fundamental Strength & Profitability 📈
Analyzing Oracle's return metrics and profitability margins offers insights into its operational efficacy and competitive positioning. Such metrics are indispensable for gauging the company's ability to generate shareholder value efficiently.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 1.20% | 5.46% | -1.16% |
| Return on Assets | 0.07% | 0.06% | 0.06% |
| Net Margin | 19.76% | 17.02% | 15.83% |
| Gross Margin | 71.41% | 72.85% | 79.08% |
| EBIT Margin | 28.80% | 25.28% | 24.51% |
| EBITDA Margin | 40.75% | 37.84% | 44.67% |
| R&D to Revenue | 17.20% | 18.85% | 18.13% |
The fundamental analysis paints a picture of a company with strong gross margin and a commitment to reinvestment in innovation through R&D. The results indicate Oracle's ability to yield profitability from core operations while navigating industry challenges and capitalizing on its strategic strengths.
Price Development 📉
Dividend Scoring System 📊
| Category | Score | Score Bar |
|---|---|---|
| Dividend yield | 3 | |
| Dividend Stability | 4 | |
| Dividend growth | 3 | |
| Payout ratio | 4 | |
| Financial stability | 3 | |
| Dividend continuity | 4 | |
| Cashflow Coverage | 3 | |
| Balance Sheet Quality | 3 |
Total Score: 27/40
Rating 🏆
Oracle Corporation exhibits a well-rounded and strategic approach to dividend management, offering moderate yields complemented by robust stability and consistent return growth metrics. While the leverage ratios reflect aggressive debt management, the overall assessment remains positive, driven by strong fundamental performance and sustainable payout regimes. This makes Oracle a compelling prospect for investors seeking stable income with potential for capital appreciation.