Our analysis is based on comparing Marlin Business Services Corp. with the following peers – Triton International Ltd. Class A, CIT Group Inc. and Aircastle Limited (TRTN-US, CIT-US and AYR-US).
Marlin Business Services Corp.’s dividend yield is 2.24 percent and its dividend payout is 46.28 percent. This compares to a peer average dividend yield of 3.26 percent and a payout level of 15.84 percent. This combination of a relatively lower dividend yield and a higher payout ratio suggest that the dividend payout might not be sustainable. Supporting this is the company’s average dividend quality score of 58 out of a possible score of 100, which points to some weakness in being able to sustain the higher payout ratio.
Dividend Quality Overview
- Over the last twelve months (prior to March 31, 2017), MRLN-US paid a medium quality dividend, which represents a yield of 2.24% 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 medium quality and 1 was low quality.
- The ending cash balance, with a dividend coverage of 10.33x, 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 March 31, 2017), MRLN-US paid a medium 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 6.20x), investing cash flow (coverage of -20.83x), issuance cash flow (coverage of 15.84x) and twelve-month prior cash (coverage of 10.69x), for a total dividend coverage of 13.28x.
MRLN-US‘s issuance cash flow includes outflows from net share buybacks (coverage of -0.00x). Thus, the total coverage including share buybacks is 11.33x, 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 net cash inflow from issuance was required (in addition to operating and investment cash) to pay the dividend, which suggests a medium dividend quality.
|Dividend Yield (%)||1.39||9.58||2.3||16.18||2.63||2.24|
|Dividend Payout (%)||30.77||33.6||31.54||42.4||40.58||46.28|
A complete list of metrics and analysis is available on the company page.
Marlin Business Services Corp. is a bank holding company, which engages in the provision of equipment leasing solutions to small and mid-sized businesses. Its products and services includes equipment financing vendor programs and for businesses; funding stream business loans; and franchise financing. The company was founded on August 5, 2003 and is headquartered in Mount Laurel, NJ.
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