July 16, 2025 a 03:31 am
TMO: Dividend Analysis - Thermo Fisher Scientific Inc.
Thermo Fisher Scientific Inc. showcases a solid dividend history with reliable growth patterns. The relatively low dividend yield is compensated by steady dividend increases over the years, evidencing the company's commitment to returning value to shareholders while emphasizing growth in other business areas.
Overview 📊
Thermo Fisher Scientific operates in the healthcare sector, providing essential tools and services to scientific communities and research institutions globally. The company sports a dividend yield of 0.40%, with a current dividend per share of 1.53 USD. With a 17-year unbroken dividend history, the last cut or suspension record remains delightfully clean.
| Sector | Dividend yield | Current dividend per share | Dividend history | Last cut or suspension |
|---|---|---|---|---|
| Healthcare | 0.40% | 1.53 USD | 17 years | None |
Dividend History 📈
Diligently maintaining and incrementing dividends over the years underscores Thermo Fisher Scientific's financial health and dedication to shareholders. This history is a significant indicator of potential returns and confidence in sustainable earnings.
| Year | Dividend per share (USD) |
|---|---|
| 2025 | 1.29 |
| 2024 | 1.56 |
| 2023 | 1.40 |
| 2022 | 1.20 |
| 2021 | 1.04 |
Dividend Growth 🗣️
Examining the growth trajectory of dividends reveals strategic corporate priorities and return policies. Thermo Fisher Scientific has shown consistent dividend growth, marking a compounded growth of 14.47% over 3 years and 15.47% over 5 years. This reflects a robust strategy aligning with enhanced shareholder value.
| Time | Growth |
|---|---|
| 3 years | 14.47% |
| 5 years | 15.47% |
The average dividend growth is 15.47% over 5 years. This demonstrates moderate but steady dividend growth, reinforcing investor confidence and long-term appeal.
Payout Ratio ✅
Payout ratios indicate sustainable dividend payments balanced with reinvestments. Thermo Fisher maintains an EPS-based payout ratio of 8.85% and a free cash flow-based ratio of 8.57%, suggesting ample wiggle room for future growth and potentially increased payouts.
| Key figure | Ratio |
|---|---|
| EPS-based | 8.85% |
| Free cash flow-based | 8.57% |
The EPS payout of 8.85% and FCF payout of 8.57% both reflect a conservative approach, indicating a well-capitalized company with potential to invest further in growth or to increase future dividend payouts.
Cashflow & Capital Efficiency 📈
Scrutinizing cashflows and capital efficiency metrics helps in forecasting a company's financial health. Thermo Fisher demonstrates efficient cash and capital utilization, accommodating investments and operational needs effectively while ensuring shareholder returns.
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Free Cash Flow Yield | 3.20% | 3.38% | 3.66% |
| Earnings Yield | 3.22% | 2.93% | 3.19% |
| CAPEX to Operating Cash Flow | 24.50% | 17.59% | 16.15% |
| Stock-based Compensation to Revenue | 0.68% | 0.65% | 0.70% |
| Free Cash Flow / Operating Cash Flow Ratio | 75.50% | 82.41% | 83.85% |
Given the robust free cash flow yield and efficient use of capital, as demonstrated by a low CAPEX to OCF ratio, Thermo Fisher proves its capacities in generating high returns on capital efficiently.
Balance Sheet & Leverage Analysis 📉
Balance sheet scrutiny unveils leverage and liquidity positions, crucial for understanding fiscal resilience. Thermo Fisher's ratios suggest a balanced debt profile with effective asset utilization strategies ensuring stability through different economic cycles.
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Debt-to-Equity | 78.42% | 74.71% | 63.12% |
| Debt-to-Assets | 35.50% | 35.37% | 32.14% |
| Debt-to-Capital | 43.95% | 42.76% | 38.69% |
| Net Debt to EBITDA | 2.17 | 2.42 | 2.31 |
| Current Ratio | 1.48 | 1.75 | 1.66 |
| Quick Ratio | 1.15 | 1.39 | 1.29 |
| Financial Leverage | 2.21 | 2.11 | 1.96 |
Thermo Fisher's leverage positions, alongside its satisfactory current and quick ratios, underline a well-managed leverage strategy, facilitating robust solvency and liquidity even amidst challenging conditions.
Fundamental Strength & Profitability 🏦
Profitability metrics illustrate the potential for long-term success, driven by efficient operations and robust margins. Thermo Fisher has maintained consistently healthy margins and returns, reflecting strong underlying business activity.
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Return on Equity | 15.80% | 12.83% | 12.78% |
| Return on Assets | 7.15% | 6.07% | 6.51% |
| Margins: Net | 15.47% | 13.99% | 14.77% |
| EBIT Margin | 19.06% | 17.90% | 19.65% |
| EBITDA Margin | 26.59% | 25.85% | 27.52% |
| Gross Margin | 43.42% | 39.93% | 41.28% |
| Research & Development to Revenue | 3.28% | 3.12% | 3.24% |
With impressive returns on equity and assets, together with strong profitability margins, Thermo Fisher evidences efficient asset usage and cost management strategies, reinforcing its profitability outlook.
Price Development 📉
Dividend Scoring System ✅
| Category | Score | Score Bar |
|---|---|---|
| Dividend yield | 2 | |
| Dividend Stability | 4 | |
| Dividend growth | 5 | |
| Payout ratio | 4 | |
| Financial stability | 5 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 5 |
Total Score: 34/40
Rating 🏅
Thermo Fisher Scientific Inc. holds a high rating due to its steady and sustainable dividend growth, robust financial stability, and comprehensive cash flow coverage. Despite a comparatively low dividend yield, the overall financial health, growth prospects, and shareholder-friendly policies make it an attractive investment.