Leucadia National Corp. : LUK-US: Dividend Analysis : June 19th, 2017 (record date) : By the numbers : June 19, 2017

Our analysis is based on comparing Leucadia National Corp. with the following peers – Hormel Foods Corporation, Tyson Foods, Inc. Class A, Universal Forest Products, Inc., Ball Corporation, Greif Class A, Darling Ingredients Inc., Weyerhaeuser Company, Aptargroup, Inc. and Silgan Holdings Inc. (HRL-US, TSN-US, UFPI-US, BLL-US, GEF-US, DAR-US, WY-US, ATR-US and SLGN-US).

Leucadia National Corp.’s dividend yield is 0.96 percent and its dividend payout is 14.93 percent. This compares to a peer average dividend yield of 1.34 percent and a payout level of 27.27 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 83 out of a possible score of 100 looks sustainable.

Dividend Yield
Dividend Quality Score

Dividend Quality Overview

  • Over the last twelve months (prior to March 31, 2017), LUK-US paid a high quality dividend, which represents a yield of 0.96% 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 2 were high quality and 3 were low quality.
  • The ending cash balance, with a dividend coverage of 215.08x, 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), LUK-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 36.37x), investing cash flow (coverage of 0.84x), issuance cash flow (coverage of -17.38x) and twelve-month prior cash (coverage of 195.03x), for a total dividend coverage of 216.08x.

LUK-US‘s issuance cash flow includes outflows from net debt repayment (coverage of -15.63x) and net share buybacks (coverage of -0.96x). Thus, the total coverage including share buybacks is 217.04x, 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 (%) 1.05 0.88 1.13 1.47 1.09 0.96
Dividend Payout (%) 7.23 24.34 47.01 34.52 74.1 14.93

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

Company Profile

Leucadia National Corp. is a diversified holding company. It engages in investment banking and capital markets; commercial mortgage banking, online foreign exchange trading services, real estate, vehicle finance, beef processing; manufacturing; exploration and development of oil and gas; automobile dealerships, insurance and consumer products, gold and silver mining project and asset management. The company operates through the following segments: Jefferies, National Beef, and Corporate and Other. The Jefferies segment provide integrated securities and investment banking services. The National Beef segment processes and markets fresh boxed beef, case-ready beef, beef by-products and wet blue leather for domestic and international markets. The Corporate and Other segment includes other financial instruments. Leucadia National was founded in 1968 and is headquartered in New York, NY.

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