June 13, 2025 a 12:46 pm
XYL: Dividend Analysis - Xylem Inc.
Xylem Inc. presents a robust dividend growth history, bolstered by consistent financial performance and strategic capital allocation. The company's strong market position in the water technology sector underlines its resilience and capacity to generate sustainable shareholder returns. With a diversified portfolio and innovative solutions, Xylem remains a compelling choice for investors seeking both income and growth potential.
📊 Overview
Xylem Inc. operates in the industrial water technology sector, serving a global market. The company offers a dividend yield of 1.21%, with a current dividend per share of $1.44. Xylem boasts a 15-year history of consistent dividend payments, with no recent cuts or suspensions.
| Metric | Value |
|---|---|
| Sector | Industrial Water Technology |
| Dividend Yield | 1.21% |
| Current Dividend per Share | $1.44 |
| Dividend History | 15 years |
| Last Cut or Suspension | None |
🗣️ Dividend History
Maintaining a steady dividend payment over 15 years signifies Xylem's commitment to returning value to shareholders. This history reflects financial health and reliability, critical for income-focused investors.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 0.80 |
| 2024 | 1.44 |
| 2023 | 1.32 |
| 2022 | 1.20 |
| 2021 | 1.12 |
📈 Dividend Growth
Dividend growth is a marker of a company's profitability and confidence in continued success. Over the past 3 years, growth has been 8.74%, and over 5 years, 8.45%.
| Time | Growth |
|---|---|
| 3 years | 8.74% |
| 5 years | 8.45% |
The average dividend growth is 8.45% over 5 years, indicating moderate but steady growth.
💼 Payout Ratio
The payout ratio indicates the portion of earnings distributed as dividends, crucial for assessing sustainability.
| Key Figure | Ratio |
|---|---|
| EPS-based | 38.72% |
| Free Cash Flow-based | 39.50% |
Both the EPS and Free Cash Flow payout ratios reflect a healthy balance, supporting dividend sustainability and potential future increases.
🔍 Cashflow & Capital Efficiency
Analyzing cash flow metrics provides insight into financial stability and potential for reinvestment.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 3.35% | 2.28% | 1.95% |
| Earnings Yield | 3.16% | 2.45% | 1.78% |
| CAPEX to Operating Cash Flow | 25.42% | 32.38% | 34.90% |
| Stock-based Compensation to Revenue | 0.65% | 0.81% | 0.67% |
| Free Cash Flow / Operating Cash Flow Ratio | 74.58% | 67.62% | 65.10% |
| Return on Invested Capital | 6.19% | 4.46% | 7.80% |
These results suggest Xylem's strong cash flow management and potential for sustained profitability, aiding dividend continuity.
🥇 Balance Sheet & Leverage Analysis
A strong balance sheet underpins a company's ability to honor financial commitments and fund growth.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 18.94% | 23.51% | 55.78% |
| Debt-to-Assets | 12.22% | 14.83% | 24.51% |
| Debt-to-Capital | 15.93% | 19.03% | 35.81% |
| Net Debt to EBITDA | 0.55 | 1.19 | 1.33 |
| Current Ratio | 1.76 | 1.76 | 1.89 |
| Quick Ratio | 1.33 | 1.30 | 1.39 |
| Financial Leverage | 1.55 | 1.58 | 2.28 |
These leverage ratios demonstrate a stable financial structure, with manageable debt levels ensuring operational flexibility.
📊 Fundamental Strength & Profitability
Performance metrics reflect management's effectiveness in utilizing assets and ensuring profitability.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 8.36% | 5.99% | 10.16% |
| Return on Assets | 5.39% | 3.78% | 4.46% |
| Margins: Net | 10.39% | 8.27% | 6.43% |
| Margins: EBIT | 12.51% | 9.29% | 8.87% |
| Margins: EBITDA | 19.07% | 15.62% | 13.67% |
| Margins: Gross | 37.51% | 36.90% | 37.74% |
| Research & Development to Revenue | 2.69% | 3.15% | 3.73% |
Positive returns and margins illustrate Xylem's efficient asset utilization and strategic cost management, enhancing profitability.
📉 Price Development
✅ Dividend Scoring System
| Criteria | Score | Rating |
|---|---|---|
| Dividend Yield | 3/5 | |
| Dividend Stability | 5/5 | |
| Dividend Growth | 4/5 | |
| Payout Ratio | 4/5 | |
| Financial Stability | 4/5 | |
| Dividend Continuity | 5/5 | |
| Cashflow Coverage | 4/5 | |
| Balance Sheet Quality | 4/5 |
Total Score: 33 out of 40
🗣️ Rating
Xylem Inc. enjoys a strong position in the dividend investor landscape, characterized by a stable and growth-oriented dividend policy supported by solid financial metrics. The combination of moderate yield, robust dividend stability, and growth make it an attractive prospect for long-term income-focused portfolios.