April 13, 2025 a 03:31 pm
SYK: Dividend Analysis - Stryker Corporation
Stryker Corporation presents a robust dividend profile with a steady track record of consistent payouts over the years. Despite a modest dividend yield, the company showcases tangible dividend growth and solid payout ratios, reflecting its financial discipline and commitment to returning value to shareholders. However, the relatively low dividend yield suggests a more growth-oriented investment focus.
📊 Overview
As a key player in its sector, Stryker Corporation exhibits a dividend yield of 0.88% and a substantial history of 35 years without any recent cuts or suspensions, underscoring its reliability as a dividend-paying stock.
| Factor | Details |
|---|---|
| Sector | Health Care Equipment |
| Dividend yield | 0.88 % |
| Current dividend per share | 3.20 USD |
| Dividend history | 35 years |
| Last cut or suspension | None |
🗣️ Dividend History
The historical dividend performance showcases a path of consistent distribution increases, a testament to the company's robust profit-generating capabilities. Investors value such history as it speaks to management's commitment to rewarding shareholders over the long term.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 0.84 |
| 2024 | 3.24 |
| 2023 | 3.05 |
| 2022 | 2.835 |
| 2021 | 2.585 |
📈 Dividend Growth
The dividend growth rates reveal modest yet steady gains, reinforcing investor confidence in long-term income prospects.
| Time | Growth |
|---|---|
| 3 years | 7.82 % |
| 5 years | 8.70 % |
The average dividend growth is 8.70% over 5 years. This shows moderate but steady dividend growth.
✅ Payout Ratio
Payout ratios offer insights into the sustainability of the company's dividend policy. A balance between Earnings and Free Cash Flow-based ratios signifies prudent financial management.
| Key figure | Ratio |
|---|---|
| EPS-based | 40.73 % |
| Free cash flow-based | 35.02 % |
With an EPS payout ratio at 40.73% and Free Cash Flow ratio at 35.02%, Stryker showcases a healthy balance, suggesting ample room for future dividend increases.
💵 Cashflow & Capital Efficiency
The assessment of cash flows and capital efficiency reflects the firm's ability to support dividend payments and other financial obligations sustainably.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 2.54 % | 2.76 % | 2.20 % |
| Earnings Yield | 2.18 % | 2.78 % | 2.55 % |
| CAPEX to Operating Cash Flow | 17.80 % | 15.49 % | 22.41 % |
| Stock-based Compensation to Revenue | 1.01 % | 1.00 % | 0.91 % |
| Free Cash Flow / Operating Cash Flow Ratio | 82.20 % | 84.51 % | 77.59 % |
Stryker's strong cash flow metrics ensure that it can adequately cover dividend payments while investing in growth opportunities, bolstering its financial flexibility.
🛡️ Balance Sheet & Leverage Analysis
An analysis of the balance sheet and leverage ratios helps in understanding the company's solvency and liquidity position, indicating its ability to meet long-term obligations.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 0.07 | 0.70 | 0.79 |
| Debt-to-Assets | 0.03 | 0.33 | 0.35 |
| Debt-to-Capital | 0.06 | 0.41 | 0.44 |
| Net Debt to EBITDA | 1.74 | 2.03 | 2.47 |
| Current Ratio | 1.95 | 1.58 | 1.63 |
| Quick Ratio | 1.32 | 0.97 | 0.99 |
| Financial Leverage | 2.08 | 2.15 | 2.22 |
Strong financial ratios demonstrate adequate liquidity and a balanced debt strategy, suggesting stability and prudent financial management.
📊 Fundamental Strength & Profitability
Analyzing profitability measures provides insight into the company's operational efficiency, management effectiveness, and overall financial health.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 14.51 % | 17.02 % | 14.19 % |
| Return on Assets | 6.97 % | 7.93 % | 6.39 % |
| Margins: Net | 13.25 % | 15.44 % | 12.78 % |
| Margins: EBIT | 20.65 % | 19.06 % | 16.49 % |
| Margins: EBITDA | 25.30 % | 24.07 % | 24.59 % |
| Margins: Gross | 63.91 % | 63.89 % | 62.76 % |
| Research & Development to Revenue | 6.49 % | 6.77 % | 7.88 % |
Stryker’s profitability metrics, bolstered by efficient cost management and R&D investments, promote a sustainable competitive advantage.
💹 Price Development
🌟 Dividend Scoring System
| Category | Score | Bar |
|---|---|---|
| Dividend yield | 3 | |
| Dividend Stability | 5 | |
| Dividend growth | 4 | |
| Payout ratio | 4 | |
| Financial stability | 5 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 5 |
Total Score: 35/40
📝 Rating
Stryker Corporation is rated favorably based on its dividend metrics and solid financial standing. Though the yield is modest, the consistent growth and stability, supported by healthy financials, make it a commendable choice for investors seeking a balance between income and growth.