How safe are their respective dividend?
Thanks
DBM is expected to see a decline in earnings this year, with earnings flattening by 2024. Debt is high, at more than 2X cash flow. Its 12-month payout ratio is very low at less than 20%. Revenues have grown nicely over the years and it has a good cash flow yield. ADN is expected to grow its sales and earnings nicely over the next year, although its stock price has shown lower capital appreciation over the years vs. DBM, and its sales growth has been OK. ADN has a payout ratio slightly higher than 100%.
Given this, ADN's dividend is less safe than DBMs. DBM is larger than ADN, has shown better historical returns and has a good free cash flow yield. We like both names and feel that each can have a place within a portfolio, but given the slightly stronger financial position of DBM, we would give DBM the edge today.