Our analysis is based on comparing Kaman Corp. with the following peers – RBC Bearings Incorporated, NN, Inc., Timken Company, Lockheed Martin Corporation, Genuine Parts Company, Rexnord Corporation, JTEKT Corporation Unsponsored ADR, NOW, Inc. and Parker-Hannifin Corporation (ROLL-US, NNBR-US, TKR-US, LMT-US, GPC-US, RXN-US, JTEKY-US, DNOW-US and PH-US).
Kaman Corp.’s dividend yield is 1.41 percent and its dividend payout is 41.08 percent. This compares to a peer average dividend yield of 1.47 percent and a payout level of 45.66 percent. This relatively lagging dividend performance could spur some dividend action going forward – as long as the company’s relatively strong dividend quality score of 67 out of a possible score of 100 looks sustainable.
Dividend Quality Overview
- Over the last twelve months (prior to June 30, 2017), KAMN-US paid a high quality dividend, which represents a yield of 1.37% 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, 3 were medium quality and 1 was low quality.
- The ending cash balance, with a dividend coverage of 1.38x, provides a moderate cushion in case of a significant reduction of cash flows in the future.
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Over the last twelve months (prior to June 30, 2017), KAMN-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 4.09x), investing cash flow (coverage of -1.68x), issuance cash flow (coverage of -1.06x) and twelve-month prior cash (coverage of 1.01x), for a total dividend coverage of 2.38x.
KAMN-US’s issuance cash flow includes outflows from net debt repayment (coverage of -1.03x) and net share buybacks (coverage of -0.02x). Thus, the total coverage including share buybacks is 2.40x, 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 (%)||1.72||1.6||1.59||1.72||1.47||1.41|
|Dividend Payout (%)||31.68||30.65||28.28||33.2||34.34||41.08|
A complete list of metrics and analysis is available on the company page.
Kaman Corp. engages in the design, manufacture and distribution of aircrafts, aircraft parts and components. It operates through the following segments: Distribution, Aerospace, and Corporate. The Distribution segment offers power transmission, automation, assembly, fabrication, and repair services. The Aerospace segment produces and sells aircraft bearings, composite aero structures, and arming solutions for missile and bomb systems. The Corporate segment includes cash surrender value of life insurance policies, income tax assets, and fixed assets. The company was founded by Charles H. Kaman in 1945 and is headquartered in Bloomfield, CT.
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