SIE.DE 178.56 (-1.65%)
DE0007236101Industrial ProductsSpecialty Industrial Machinery

Last update on 2024-06-27

Siemens (SIE.DE) - Dividend Analysis (Final Score: 5/8)

In-depth analysis of Siemens (SIE.DE) dividend policy using an 8-criteria system, achieving a score of 5/8. Explore performance and stability insights.

Knowledge hint:
The dividend analysis assesses the performance and stability of Siemens (SIE.DE) dividend policy using a 8-criteria scoring system.
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Short Analysis - Dividend Score: 5

We're running Siemens (SIE.DE) against the 8-criteria scoring system to evaluate the performance and stability of a company's dividend policy.

Criteria
Dividend Yield Higher than the Industry Average?
1
Average annual Growth Rate higher than 5% in the last 20 years?
0
Average annual Payout Ratio lower than 65% in the last 20 years?
1
Dividends Well Covered by Earnings?
1
Dividends Well Covered by Cash Flow?
1
Stable Dividends Since the Company Began Paying Dividends?
0
Dividends Paid for Over 25 Years?
0
Reliable Stock Repurchases Over the Past 20 Years?
1

The dividend performance of Siemens (SIE.DE) against an 8-criteria scoring system yields a score of 5 out of 8. Notable strengths include a higher-than-industry-average dividend yield and a payout ratio mostly below 65% over 20 years. Siemens has also maintained a strong history of consistent dividends for over 25 years. Challenges are noted in the areas of dividend growth rate, dividend coverage by cash flow, and fluctuations in payout ratios, suggesting some years of financial strain. Overall, Siemens provides a stable source of dividends, though growth has been inconsistent, requiring careful consideration for long-term investment.

Insights for Value Investors Seeking Stable Income

Siemens (SIE.DE) appears to be a solid option for income-focused investors due to its reliably higher-than-average dividend yield and long history of consistent payouts. However, the slow dividend growth rate and inconsistent coverage by cash flow mean potential investors should monitor Siemens' financial performance closely before making long-term commitments. Investors looking for more aggressive growth might want to look elsewhere, but those seeking steady income would find Siemens appealing.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Dividend Yield Higher than the Industry Average?

Dividend yield measures the annual dividend payment made to shareholders, expressed as a percentage of the stock's current price. It allows investors to gauge the cash flow generated by their equity investment relative to its market price. A higher dividend yield suggests a higher cash return on the stock, which can be particularly attractive to income-focused investors.

Historical Dividend Yield of Siemens (SIE.DE) in comparison to the industry average

As of 2023, Siemens (SIE.DE) boasts a dividend yield of 2.5012%, which significantly surpasses the industry average of 1.57%. This higher-than-average dividend yield suggests that Siemens is returning a more substantial portion of its earnings to shareholders compared to its industry peers. Examining the historical dividend yields, Siemens has generally maintained yields above the industry average, with notable spikes in 2008 (3.1343%) and 2011 (3.7683%). This consistent outperformance can signal financial health and a commitment to rewarding shareholders, making it an attractive option for income-focused investors.

Average annual Growth Rate higher than 5% in the last 20 years?

What does a high Dividend Growth Rate over 20 years signify for Siemens and why is it important?

Dividend Growth Rate of Siemens (SIE.DE)

Within the last two decades, Siemens has had a mixed set of years with regards to its dividend per share ratio (DPS ratio). The percentage changes in the DPS ratio fluctuate significantly, and this instability is illustrated by the figures ranging from -25.0989% to 35.6563%. An average dividend ratio of 4.866% means that Siemens has, on average, had a near-stagnant growth in dividend payouts over the entire 20-year period. This is slightly disappointing as the growth rate falls short of the desired 5%. It suggests that while there are good years where Siemens pays a significant dividend, there are also years where dividends are slashed or eliminated. For investors looking for steady dividend growth, these fluctuations could be seen as a negative attribute. However, Siemen’s diverse product and service offerings and its market position may partially compensate for the underwhelming dividend growth.

Average annual Payout Ratio lower than 65% in the last 20 years?

Criterion 1.2 analyzes if the average payout ratio for Siemens over the past 20 years is below the 65% threshold. This metric is significant as a lower payout ratio generally implies that a company retains a larger portion of its earnings for growth and investment opportunities, ensuring a sustainable dividend policy.

Dividends Payout Ratio of Siemens (SIE.DE)

The average payout ratio for Siemens over the past 20 years is approximately 50.35%, which is well below the 65% threshold. This is a favorable trend as it indicates that Siemens has a conservative approach to distributing dividends, retaining more earnings for potential growth and investments. For instance, in 2022, the payout ratio was 86.10%, which is higher than the desired threshold, but overall, the 20-year average is comfortably under the limit. This suggests that in most years, Siemens has prioritized financial prudence and stability, which is beneficial for long-term investors.

Dividends Well Covered by Earnings?

Dividends covered by earnings are crucial because it indicates a company's ability to sustain and possibly grow its dividend payments. A healthy coverage ratio ensures that a company is generating enough profit to cover its dividend payouts without jeopardizing its financial health.

Historical coverage of Dividends by Earnings of Siemens (SIE.DE)

Siemens' yearly Earnings Per Share (EPS) against Dividend Per Share (DPS) over two decades show a mixed trend regarding dividend sustainability. Ideally, a lower payout ratio indicates more earnings retained to fuel growth, with an acceptable range being 0.4 to 0.6. Fir the given period, Siemens’ dividend cover ratio generally hovers around the mid-range of this spectrum with some years dipping a bit too low and a few years showing very strong cover near 0.8 or above, such as in 2010 (0.595) and 2020 (0.780). These fluctuations suggest periods of healthier sustainability followed by times of stretched payout capacity. Although the numbers highlight some volatility, Siemens has overall managed to cover its payouts with earnings decently over time. Considering years with ratios below 0.4 like 2014 and 2021 could raise concerns. Therefore, observing continuous stable EPS growth will be vital for long-term sustainable dividends. Siemens' dividends are moderately well-covered by earnings, which portrays a cautiously optimistic trend but warrants performance consistency for future dividend reliability.

Dividends Well Covered by Cash Flow?

Dividend coverage by cash flow measures if a company generates enough free cash flow to cover dividend payments, indicating dividend sustainability.

Historical coverage of Dividends by Cashflow of Siemens (SIE.DE)

Examining Siemens' data, the recent values (2003-2023) for Free Cashflow and Dividend Payout show that the coverage ratio fluctuates, often below the ideal 1.0. The highest ratio appears in 2006, indicating strong cash flow relative to dividends. However, strained ratios in 2004 (-3.03) and 2005 (-2.63) suggest unsustainable dividends then. Current figures close to 0.3-0.4, below the ideal, may not fully support Siemens' dividends. While improved from earlier lows, ongoing caution and scrutiny are necessary given the current and historical coverage rates.

Stable Dividends Since the Company Began Paying Dividends?

Stable dividends over a 20-year period ensure consistent income for investors and reflect positively on a company's financial health.

Historical Dividends per Share of Siemens (SIE.DE)

Reviewing Siemens' dividend per share over the past 20 years reveals a generally stable and increasing trend. There were minor fluctuations, such as from 2003 to 2004 (1.4686 to 1.1) and from 2019 to 2021 (3.9 to 3.5), but no years witnessed a substantial drop exceeding 20%. Moreover, any slight decreases were followed by quick recoveries or increases. This consistent growth is a positive indicator, demonstrating Siemens' stable and reliable financial performance, thus making it attractive to long-term, income-seeking investors.

Dividends Paid for Over 25 Years?

Dividends Paid for Over 25 Years?

Historical Dividends per Share of Siemens (SIE.DE)

The provided data shows that Siemens (SIE.DE) has consistently paid dividends without interruption for over two decades, cumulating to 24 years of data. The years 1999 to 2001 registered zero or insignificant dividends, yet from 2002 onward, the dividends have not only been paid consistently but have also shown an upward trend. As of 2023, the dividend per share stands at €4.25, up from €0 in 1999—indicating a robust commitment to rewarding shareholders. This long history of dividends is significant as it suggests financial stability and a shareholder-friendly policy, both crucial for investor confidence. Thus, the trend in Siemens' dividend payments can be seen as highly positive.

Reliable Stock Repurchases Over the Past 20 Years?

Explain the criterion for Siemens (SIE.DE) and why it is important to consider

Historical Number of Shares of Siemens (SIE.DE)

The analysis of Siemens' stock repurchases over the past two decades focuses on maintaining a reliable trend in buybacks. A steady decrease in the number of shares indicates that Siemens is consistently returning value to shareholders by reducing share count. This is important as it can signal confidence in the company's future prospects and provide a boost to earnings per share (EPS).


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