Ingersoll-Rand Plc : IR-US: Dividend Analysis : June 09th, 2017 (record date) : By the numbers : June 8, 2017

Our analysis is based on comparing Ingersoll-Rand Plc with the following peers – Lennox International Inc., Dover Corporation, SPX Corporation, Parker-Hannifin Corporation, AAON, Inc., Continental Materials Corporation, Flowserve Corporation, IMI plc Sponsored ADR, Atlas Copco AB Sponsored ADR Class B and Metso Oyj Sponsored ADR (LII-US, DOV-US, SPXC-US, PH-US, AAON-US, CUO-US, FLS-US, IMIAY-US, ATLCY-US and MXCYY-US).

Ingersoll-Rand Plc’s dividend yield is 2.09 percent and its dividend payout is 26.18 percent. This compares to a peer median dividend yield of 1.69 percent and a payout level of 46.93 percent. This relatively higher dividend yield and lower payout ratio makes the company a good candidate for dividend investors looking seeking good current dividend income within this peer group. In addition, the company’s relatively good dividend quality score of 83 out of a possible score of 100, underscores its attractiveness for dividend investors.

Dividend Yield
Dividend Quality Score

Dividend Quality Overview

  • Over the last twelve months (prior to March 31, 2017), IR-US paid a high quality dividend, which represents a yield of 1.63% 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 3.58x, provides a substantial cushion in case of a significant reduction of cash flows in the future.
Dividend Quality Score Vs Dividend Yield

Quadrant label definitions. Hover to know more

High Score;High Yield, High Score;Low Yield, Low Score;Low Yield, Low Score;High Yield

Dividend Coverage

Over the last twelve months (prior to March 31, 2017), IR-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 3.98x), investing cash flow (coverage of 0.64x), issuance cash flow (coverage of -1.58x) and twelve-month prior cash (coverage of 1.66x), for a total dividend coverage of 4.58x.

IR-US‘s issuance cash flow includes outflows from net debt repayment (coverage of -1.10x) and net share buybacks (coverage of -0.51x). Thus, the total coverage including share buybacks is 5.09x, which reflects our assumption that the cash paid for share buybacks is discretionary and could instead be used to pay dividends.

Dividend Coverage by Cash Flow (TTM)

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 History

Item 2012-12-31 2013-12-31 2014-12-31 2015-12-31 2016-12-31 Latest
Dividend Yield (%) 1.36 1.41 1.59 2.1 1.79 2.09
Dividend Payout (%) 19.75 40.38 29.41 46.77 24.11 26.18

A complete list of metrics and analysis is available on the company page.

Company Profile

Ingersoll-Rand Plc engages in the development, manufacture and trade of air and ventilation systems. It operates through two segments: Climate and Industrial. The Climate segment provides products for heating, ventilation, and air conditioning systems. The Industrial segment offers compressed air an gas systems, power tools, material handling systems, and fluid management equipment. It distributes its products under the following brand names: Ingersoll-Rand, Trane, Thermo King, American Standard, ARO, and Club Car. The company was founded in December 2001 and is headquartered in Swords, Ireland.


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