November 13, 2025 a 12:47 pm
STZ: Dividend Analysis - Constellation Brands, Inc.
Constellation Brands, Inc., a leader in the beverage industry, showcases a robust dividend profile, underpinned by a reasonable yield and consistent growth over the past decade. The company's prudent financial strategies are reflected in its impressive dividend stability and steady payout ratio, making it a compelling choice for income-seeking investors. However, with certain leverage ratios highlighting potential areas of financial strain, continuous monitoring is advisable.
📊 Overview
Constellation Brands operates within the Beverages sector, boasting a solid dividend yield and consistent payout history.
| Metric | Details |
|---|---|
| Sector | Beverages |
| Dividend Yield | 3.16 % |
| Current Dividend per Share | 4.03 USD |
| Dividend History | 11 years |
| Last Cut or Suspension | None |
📈 Dividend History
The company's dividend history highlights a reliable and progressive approach to shareholder returns over the past decade, underscoring its commitment to lucrative payouts.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 4.07 |
| 2024 | 3.92 |
| 2023 | 3.47 |
| 2022 | 3.16 |
| 2021 | 3.03 |
📈 Dividend Growth
With a moderate average growth rate of approximately 5.57% over 5 years, Constellation Brands demonstrates a steady ability to enhance shareholder value.
| Time | Growth |
|---|---|
| 3 years | 8.96 % |
| 5 years | 5.57 % |
The average dividend growth is 5.57 % over 5 years. This shows moderate but steady dividend growth.
📉 Payout Ratio
Constellation Brands maintains a prudent payout ratio, balancing between rewarding its shareholders and reinvesting in growth opportunities.
| Key Figure | Ratio |
|---|---|
| EPS-based | 58.0 % |
| Free Cash Flow-based | 38.2 % |
The EPS payout ratio of 58.0% indicates a healthy balance, while the FCF payout of 38.2% suggests effective cash management.
✅ Cashflow & Capital Efficiency
Strong cash flow generation coupled with efficient capital utilization underscores the company's potential for sustainable growth.
| Year | 2023 | 2024 | 2025 |
|---|---|---|---|
| Free Cash Flow Yield | 3.99 % | 3.32 % | 6.09 % |
| Earnings Yield | -0.16 % | 3.79 % | -0.26 % |
| CAPEX to Operating Cash Flow | 37.56 % | 45.65 % | 38.52 % |
| Stock-based Compensation to Revenue | 0.72 % | 0.64 % | 0.71 % |
| Free Cash Flow / Operating Cash Flow Ratio | 62.44 % | 54.35 % | 61.48 % |
The strong free cash flow yield relative to earnings highlights resilient cash generation capabilities, while capital efficiency remains conscientious.
✅ Balance Sheet & Leverage Analysis
While leverage ratios suggest potential financial strain, the company's liquidity remains stable, supporting its operating requirements effectively.
| Year | 2023 | 2024 | 2025 |
|---|---|---|---|
| Debt-to-Equity | 1.54 | 1.29 | 1.76 |
| Debt-to-Assets | 52.55 % | 48.88 % | 55.95 % |
| Debt-to-Capital | 60.64 % | 56.31 % | 63.77 % |
| Net Debt to EBITDA | 10.98 | 4.02 | 15.39 |
| Current Ratio | 1.18 | 1.19 | 0.92 |
| Quick Ratio | 0.54 | 0.53 | 0.56 |
| Financial Leverage | 2.93 | 2.64 | 3.15 |
The company's financial leverage and debt-to-equity ratio necessitate close observation, with a moderate quick ratio underscoring liquidity sufficiency.
✅ Fundamental Strength & Profitability
Despite occasional fluctuations in net margins, Constellation Brands benefits from robust gross profits and steady return on equity, underpinning its business model's efficacy.
| Year | 2023 | 2024 | 2025 |
|---|---|---|---|
| Return on Equity | -0.84 % | 17.73 % | -1.18 % |
| Return on Assets | -0.29 % | 6.72 % | -0.38 % |
| Net Margin | -0.75 % | 17.34 % | -0.80 % |
| EBIT Margin | 8.27 % | 26.66 % | 3.29 % |
| EBITDA Margin | 12.36 % | 30.97 % | 7.67 % |
| Gross Profit Margin | 50.90 % | 49.28 % | 50.96 % |
| R&D to Revenue | 0 | 0 | 0 |
Although profitability indicators like return on equity are satisfactory, the company's ability to maintain swift profit margins solidifies its market position.
📈 Price Development
💡 Dividend Scoring System
| Criteria | Score | Score Bar |
|---|---|---|
| Dividend Yield | 4 | |
| Dividend Stability | 5 | |
| Dividend Growth | 3 | |
| Payout Ratio | 4 | |
| Financial Stability | 3 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 3 |
Total Score: 31/40
🗣️ Rating
Constellation Brands delivers a compelling dividend profile with consistent payouts and moderate growth, warranting its consideration as a reliable income earner. Its solid yield and growth trajectory favor long-term wealth generation despite certain leverage concerns. Recommended for risk-aware investors seeking steady dividend income within the beverage sector.