Entravision generated $48 million in free cash flow last year, down from $67 million in 2022. That's no bueno. In fact, last year's free cash flow total was the lowest in four years and this year, it's projected to drop another $1 million. Safety Net does not like to see declining cash flow. The model will lower its ratings if cash flow is falling. The good news is that even though free cash flow fell last year, the company only paid 37% of it in dividends. This year the payout ratio is expected to rise to 43%, which is still low. My threshold is 75%. If a company is paying out less than 75% of its free cash flow in earnings, it means it can afford the dividend. But just because Entravision can afford its dividend doesn't mean its dividend is safe... |
No comments:
Post a Comment
Keep a civil tongue.