Our analysis is based on comparing Akzo Nobel NV with the following peers – Sherwin-Williams Company, PPG Industries, Inc., RPM International Inc., FMC Corporation and Huntsman Corporation (SHW-US, PPG-US, RPM-US, FMC-US and HUN-US).
Akzo Nobel NV’s dividend yield is 6.56 percent and its dividend payout is 44.39 percent. This compares to a peer median dividend yield of 1.55 percent and a payout level of 37.78 percent. This type of dividend performance might make it a good stock for dividend investors. However, the company’s average dividend quality score of 58 out of a possible score of 100, points to some weakness in the sustainability of its robust payout ratio, and makes its less attractive for dividend investors seeking current income.
Dividend Quality Overview
- Over the last twelve months (prior to September 30, 2017), AKZOY-US paid a low quality dividend, which represents a yield of 1.97% at the current price.
- Dividend quality trend has not been consistent over the last five years. Dividends were paid during each of these years — of these 1 was high quality, 2 were medium quality and 2 were low quality.
- The ending cash balance, with a dividend coverage of 4.31x, provides a substantial cushion in case of a significant reduction of cash flows in the future.
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Over the last twelve months (prior to September 30, 2017), AKZOY-US paid a low quality dividend.
The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 3.95x), investing cash flow (coverage of -4.14x), issuance cash flow (coverage of -0.95x) and twelve-month prior cash (coverage of 6.34x), for a total dividend coverage of 5.31x.
AKZOY-US’s issuance cash flow includes outflows from net share buybacks (coverage of -0.60x). Thus, the total coverage including share buybacks is 5.91x, which reflects our assumption that the cash paid for share buybacks is discretionary and could instead be used to pay dividends.
These coverage ratio factors imply that the firm had to dip into the beginning cash balance to pay the dividend, which suggests a low dividend quality.
|Dividend Yield (%)||2.09||2||2.13||1.84||2.32||6.56|
|Dividend Payout (%)||-13.65||51.12||46.47||32.63||35.45||44.39|
A complete list of metrics and analysis is available on the company page.
Akzo Nobel NV is a holding company that engages in the manufacture and sale of coating and paint products. It operates through the following segments: Decorative Paints, Performance Coatings, and Specialty Chemicals. The Decorative Paints segment manufactures and supplies a range of interior and exterior decoration and protection products for professional and do-it-yourself markets. The Performance Coatings segment produces automotive and aerospace; industrial; marine and protective; and powder coatings. The Specialty Chemicals segment manufactures functional, industrial, and pulp and performance chemicals. The company was founded in 1994 and is headquartered in Amsterdam, Netherlands.
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