Our analysis is based on comparing VSE Corp. with the following peers – Kratos Defense & Security Solutions, Inc., Engility Holdings, Inc., KEYW Holding Corporation, Raytheon Company, Lockheed Martin Corporation, Northrop Grumman Corporation, General Dynamics Corporation, Aerojet Rocketdyne Holdings, Inc., Teledyne Technologies Incorporated and Orbital ATK, Inc. (KTOS-US, EGL-US, KEYW-US, RTN-US, LMT-US, NOC-US, GD-US, AJRD-US, TDY-US and OA-US).
VSE Corp.’s dividend yield is 0.70 percent and its dividend payout is 9.29 percent. This compares to a peer average dividend yield of 1.47 percent and a payout level of 28.15 percent. This relatively lagging dividend performance could spur some dividend action going forward – except the company’s current dividend quality score of 50 out of a possible score of 100 is only about average.
Dividend Quality Overview
- Over the last twelve months (prior to March 31, 2017), VSEC-US paid a high quality dividend, which represents a yield of 0.56% 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 3 were high quality, 1 was medium quality and 1 was low quality.
- The ending cash balance is less than the last full year dividend payment and cannot be relied on to cushion any significant reduction of cash flows in the future.
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Over the last twelve months (prior to March 31, 2017), VSEC-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 12.78x), investing cash flow (coverage of -2.15x), issuance cash flow (coverage of -9.68x) and twelve-month prior cash (coverage of 0.23x), for a total dividend coverage of 1.18x.
VSEC-US‘s issuance cash flow includes outflows from net debt repayment (coverage of -2.19x).
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 (%)||1.22||0.71||0.58||0.68||0.59||0.7|
|Dividend Payout (%)||7.48||7.94||10.53||9.09||9.31||9.29|
A complete list of metrics and analysis is available on the company page.
VSE Corp. engages in the provision of engineering and technical support services. It operates through the following segments: Supply Chain Management Group; Aviation Group; Federal Services Group; and IT, Energy and Management Consulting Group. The Supply Chain Management Group segment distributes vehicle parts and accessories. The Aviation Group segment offers maintenance, repair, and operations services, supply chain solutions, and engine parts and equipment. The Federal Services Group segment includes engineering, industrial, logistics, and legacy equipment sustainment services. The IT, Energy and Management Consulting Group segment provides technical and advisory services to government agencies. The company was founded on January 22, 1959 and is headquartered in Alexandria, VA.
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