Our analysis is based on comparing Federated Investors, Inc. with the following peers – SEI Investments Company, Legg Mason, Inc., T. Rowe Price Group, Franklin Resources, Inc., Waddell & Reed Financial, Inc. Class A, Eaton Vance Corp., Virtus Investment Partners, Inc., Calamos Asset Management, Inc. Class A, Manning & Napier, Inc. Class A and U.S. Global Investors, Inc. Class A (SEIC-US, LM-US, TROW-US, BEN-US, WDR-US, EV-US, VRTS-US, CLMS-US, MN-US and GROW-US).
Federated Investors, Inc.’s dividend yield is 6.93 percent and its dividend payout is 51.28 percent. This compares to a peer median dividend yield of 2.76 percent and a payout level of 49.08 percent. This type of dividend performance might make it a good stock for dividend investors. In addition, the company’s relatively good dividend quality score of 83 out of a possible score of 100 points to some sustainability of its robust payout ratio, and underscores its attractiveness for dividend investors seeking current income.
Dividend Quality Overview
- Over the last twelve months (prior to September 30, 2016), FII-US paid a high quality dividend, which represents a yield of 3.47% 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 4 were high quality and 1 was low quality.
- The ending cash balance, with a dividend coverage of 3.03x, 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, 2016), FII-US paid a high 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 2.56x), investing cash flow (coverage of 0.02x), issuance cash flow (coverage of -1.15x) and twelve-month prior cash (coverage of 2.79x), for a total dividend coverage of 4.03x.
FII-US‘s issuance cash flow includes outflows from net debt repayment (coverage of -0.25x) and net share buybacks (coverage of -0.74x). Thus, the total coverage including share buybacks is 4.77x, 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’s dividends are wholly paid from operating and investing cash flows net of any debt repayments, which suggests a high dividend quality.
|Dividend Yield (%)||6.36||12.15||3.4||3.03||3.51||6.93|
|Dividend Payout (%)||66.21||53.63||63.23||70.42||61.73||51.28|
A complete list of metrics and analysis is available on the company page.
Federated Investors, Inc. engages in the provision of investment management products and related financial services. It sponsors, markets and provides investment related services to various investment products, including mutual funds and separate accounts. The company was founded by John F. Donahue and Richard B. Fisher in 1955 and is headquartered in Pittsburgh, PA.
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