July 19, 2026 a 02:46 am
TDG: Dividend Analysis - TransDigm Group Incorporated
TransDigm Group's dividend profile reveals a lucrative yet complex proposition for potential investors. With a current dividend yield of 12.64%, it's enticing for income-focused portfolios. However, despite an 11-year dividend history, the recent suspension history signals caution. Investors need to weigh the high payout ratios against the company's financial stability before making decisions.
📊 Overview
The overview provides critical insights into the company's sector and current dividend performance, highlighting areas of strength and potential red flags.
| Category | Details |
|---|---|
| Sector | Industrials |
| Dividend yield | 12.64 % |
| Current dividend per share | 165.45 USD |
| Dividend history | 11 years |
| Last cut or suspension | 2022 |
🗣️ Dividend History
The dividend history offers insight into the company's commitment to returning capital to shareholders, a vital factor for long-term income investors.
| Year | Dividend Per Share (USD) |
|---|---|
| 2025 | 90 |
| 2024 | 75 |
| 2023 | 35 |
| 2022 | 18.5 |
| 2019 | 62.5 |
📈 Dividend Growth
Dividend growth is a critical metric for assessing the sustainability and future potential of a company's dividend payments, which is essential for long-term portfolio stability.
| Time | Growth |
|---|---|
| 3 years | 0.69 % |
| 5 years | 0.08 % |
The average dividend growth is 0.08 % over 5 years. This shows moderate but steady dividend growth.
⚠️ Payout Ratio
The payout ratio is a vital indicator of whether a company retains profits to fuel growth or distributes them to shareholders, impacting the sustainability of dividend payments.
| Key figure | Ratio |
|---|---|
| EPS-based | 476 % |
| Free cash flow-based | 500 % |
Both EPS and FCF payout ratios are exceedingly high, indicating that the company may not be generating sufficient earnings or cash flow to support its dividend comfortably. This poses a substantial risk to dividend sustainability.
✅ Cashflow & Capital Efficiency
Cashflow and capital efficiency metrics provide a snapshot of the company’s cash generation capabilities and its effectiveness in utilizing capital to drive growth.
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Free Cash Flow Yield | 2.56 % | 2.28 % | 2.37 % |
| Earnings Yield | 2.69 % | 2.08 % | 2.70 % |
| CAPEX to Operating Cash Flow | 10.11 % | 8.07 % | 10.89 % |
| Stock-based Compensation to Revenue | 2.38 % | 2.73 % | 1.78 % |
| Free Cash Flow / Operating Cash Flow Ratio | 89.89 % | 91.93 % | 89.11 % |
Cashflow metrics indicate moderately stable cash generation, but the company needs to manage capital investments and stock compensations wisely to enhance efficiency and have a buffer for dividends.
📈 Balance Sheet & Leverage Analysis
The balance sheet and leverage ratios are indispensable in assessing a company's financial health and risk of insolvency.
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Debt-to-Equity | -996.27 % | -395.85 % | -310.04 % |
| Debt-to-Assets | 98.98 % | 97.31 % | 131.08 % |
| Debt-to-Capital | 111.16 % | 133.80 % | 147.61 % |
| Net Debt to EBITDA | 5.18 | 4.89 | 5.88 |
| Current Ratio | 4.27 | 1.58 | 3.21 |
| Quick Ratio | 3.24 | 1.29 | 2.25 |
| Financial Leverage | -1006.55 % | -406.77 % | -236.52 % |
Leverage ratios show a heavy debt load, increasing financial risk. Managing debt levels is crucial to maintain solvency and shareholder confidence.
🚀 Fundamental Strength & Profitability
These metrics provide an insight into the company's efficiency and its ability to generate profits from its operational activities.
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Return on Equity | -65.42 % | -27.25 % | -21.41 % |
| Return on Assets | 6.50 % | 6.70 % | 9.05 % |
| Net Margin | 19.71 % | 21.59 % | 23.49 % |
| EBIT Margin | 43.74 % | 44.09 % | 47.57 % |
| EBITDA Margin | 47.81 % | 48.02 % | 51.73 % |
| Gross Margin | 58.34 % | 58.84 % | 60.14 % |
| R&D to Revenue | 0 % | 0 % | 0 % |
While margins are robust, negative ROE indicates financial challenges. Profitability needs strategic alignment with reducing excessive leverage and enhancing operational efficiencies.
📈 Price Development
🎯 Dividend Scoring System
| Criterion | Score | Score Bar |
|---|---|---|
| Dividend yield | 4 | |
| Dividend Stability | 3 | |
| Dividend growth | 3 | |
| Payout ratio | 2 | |
| Financial stability | 2 | |
| Dividend continuity | 2 | |
| Cashflow Coverage | 3 | |
| Balance Sheet Quality | 2 |
Total Score: 21/40
🔍 Rating
Although TransDigm Group offers a high dividend yield, the worrying leverage ratios and recent dividend history suggest a cautious stance. The recommendation is to hold off significant investments until there is clarity on debt management and sustained dividend recovery.
Smart Data Insight
Master the Perfect Entry & Exit for this Stock
Don't leave your profits to chance. Historically, this stock follows specific seasonal patterns that institutional traders use to maximize returns.
- ✅ Identify the "Golden Buying Window"
- ✅ Avoid high-risk correction cycles
- ✅ Backtested data from the last 20+ years