Fastenal Company Announces Cash Dividend
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Insights
The announcement by Fastenal Company regarding its dividend payment of $0.39 per share represents a continuation of its shareholder remuneration policy, which has been consistent since the company began paying dividends in 1991. The progression to quarterly dividends since 2011 and the payment of special dividends indicate a shareholder-friendly capital allocation strategy. The increase from the previous year's dividend of $0.35 per share suggests a positive signal to the market about the company's financial health and its ability to generate cash flow.
From a financial perspective, the consistency and growth in dividend payments can be seen as a reflection of the company's operational stability and confidence in its future earnings. The historical data showing a steady increase in dividend per share over the past decade, combined with the absence of common stock repurchase in the fourth quarter of 2023, might indicate a strategic choice to prioritize direct shareholder returns over stock buybacks at this time.
It's also noteworthy that the company has the authority to purchase an additional 6,200,000 shares under the current authorization, which does not expire. This buyback program can be utilized as a tool to manage the company's equity base and potentially support the stock price in the future, subject to the company's discretion based on financial conditions and market opportunities.
Fastenal's dividend policy and its impact on investor sentiment can be a significant factor in the company's stock market performance. Dividends are often regarded as a sign of a company's maturity and stability, which can attract a specific investor base that prioritizes regular income. The announcement of a regular dividend, coupled with a history of special dividends, might appeal to value investors and could potentially reduce stock price volatility.
Furthermore, the dividend yield, calculated as the annual dividends per share divided by the stock's price, is a key metric for investors. An increase in the dividend can make the stock more attractive relative to other investment opportunities, especially in a low-interest-rate environment. However, investors also closely monitor payout ratios to ensure that dividends are sustainable and not at the expense of the company's growth potential or financial health.
The dividend declaration by Fastenal should be analyzed in the context of broader economic conditions. Dividend payments can be influenced by macroeconomic factors such as interest rates, inflation and corporate tax policies. For instance, in a rising interest rate environment, dividend-paying stocks might face competition from fixed-income securities. Conversely, in a low-rate environment, they become more attractive. Additionally, corporate tax rates on dividends can affect the net income received by shareholders and influence the company's dividend policy decisions.
It is also important to consider the potential impact of economic cycles on Fastenal's business model. As a supplier of industrial and construction supplies, its financial performance and consequently its ability to pay dividends, may be correlated with the health of the construction industry and manufacturing sectors. Economic downturns or upswings in these sectors could have a significant impact on the company's revenues and dividend-paying capacity.
We began paying annual dividends in 1991, semi-annual dividends in 2003, and then expanded to quarterly dividends in 2011. In addition to these regular dividend payments, Fastenal has previously paid special one-time dividends in December 2008, December 2012, December 2020, and December 2023. Our board of directors currently intends to continue paying quarterly dividends, though all future determination as to payment of dividends will depend upon the financial condition and results of operations of the company and such other factors as are deemed relevant by the board of directors, such as income tax rates related to dividends at that time.
In 2024, 2023, and 2022, we paid (or declared) dividends as follows:
Year |
|
First Quarter |
|
Second Quarter |
|
Third Quarter |
|
Fourth Quarter |
|
Sub-Total (Regular) |
Fourth Quarter (Special) |
|
Total |
|||||||
2024 |
|
$ |
0.39 |
|
|
|
|
|
|
|
|
|
|
|
||||||
2023 |
|
$ |
0.35 |
|
$ |
0.35 |
|
$ |
0.35 |
|
$ |
0.35 |
|
$ |
1.40 |
$ |
0.38 |
|
$ |
1.78 |
2022 |
|
$ |
0.31 |
|
$ |
0.31 |
|
$ |
0.31 |
|
$ |
0.31 |
|
$ |
1.24 |
$ |
0.00 |
|
$ |
1.24 |
Dividend and common stock purchase activity during the last ten years:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Per |
||||||||||||
|
|
Total |
Dividends per Share |
Total Value of |
Total Number |
Share Price of |
|||||||||||||||||||||
|
Dividend |
Dividends |
Regular |
|
Special |
|
Total |
|
Common Stock |
of Shares |
Common Stock |
||||||||||||||||
Year |
Payments |
Paid |
Dividend |
|
Dividend |
|
Dividend |
|
Purchased |
Purchased |
Purchased |
||||||||||||||||
2024 |
One (1) |
|
$ |
223.1 |
|
|
$ |
0.39 |
|
|
$ |
— |
|
$ |
0.39 |
|
|
$ |
— |
|
|
— |
|
|
$ |
— |
|
2023 |
Five (2) |
|
$ |
1,016.8 |
|
|
$ |
1.40 |
|
|
$ |
0.38 |
|
$ |
1.78 |
|
|
$ |
— |
|
|
— |
|
|
$ |
— |
|
2022 |
Four |
|
$ |
711.3 |
|
|
$ |
1.24 |
|
|
$ |
— |
|
$ |
1.24 |
|
|
$ |
237.8 |
|
|
5,000,000 |
|
|
$ |
47.58 |
|
2021 |
Four |
|
$ |
643.7 |
|
|
$ |
1.12 |
|
|
$ |
— |
|
$ |
1.12 |
|
|
$ |
— |
|
|
— |
|
|
$ |
— |
|
2020 |
Five (2) |
|
$ |
803.4 |
|
|
$ |
1.00 |
|
|
$ |
0.40 |
|
$ |
1.40 |
|
|
$ |
52.0 |
|
|
1,600,000 |
|
|
$ |
32.54 |
|
2019 |
Four |
|
$ |
498.6 |
|
|
$ |
0.87 |
|
|
$ |
— |
|
$ |
0.87 |
|
|
$ |
— |
|
|
— |
|
|
$ |
— |
|
2018 |
Four |
|
$ |
441.9 |
|
|
$ |
0.77 |
|
|
$ |
— |
|
$ |
0.77 |
|
|
$ |
103.0 |
|
|
4,000,000 |
|
|
$ |
25.75 |
|
2017 |
Four |
|
$ |
369.1 |
|
|
$ |
0.64 |
|
|
$ |
— |
|
$ |
0.64 |
|
|
$ |
82.6 |
|
|
3,800,000 |
|
|
$ |
21.72 |
|
2016 |
Four |
|
$ |
346.6 |
|
|
$ |
0.60 |
|
|
$ |
— |
|
$ |
0.60 |
|
|
$ |
59.5 |
|
|
3,200,000 |
|
|
$ |
18.58 |
|
2015 |
Four |
|
$ |
327.1 |
|
|
$ |
0.56 |
|
|
$ |
— |
|
$ |
0.56 |
|
|
$ |
293.0 |
|
|
14,200,000 |
|
|
$ |
20.63 |
|
Ten Year Total |
|
|
$ |
5,381.6 |
|
|
$ |
8.59 |
|
|
$ |
0.78 |
|
$ |
9.37 |
|
|
$ |
827.9 |
|
|
31,800,000 |
|
|
$ |
26.03 |
|
(1) |
The Total Dividends Paid amount includes the estimated impact from this announcement. The estimate is calculated using the 572.0 million shares outstanding at December 31, 2023. |
(2) |
There was a supplemental dividend paid in December 2020 and December 2023. |
In the fourth quarter of 2023, we did not repurchase any of our common stock.
We have authority to purchase up to 6,200,000 additional shares of our common stock under the July 12, 2022 authorization. This authorization does not have an expiration date.
All share and per share information reflects the two-for-one stock split in 2019.
About Fastenal
Fastenal provides a broad offering of industrial supplies, including fastener, safety, and metal cutting products, to manufacturing, construction, and state and local government customers through more than 3,400 in-market locations (branches and customer-specific Onsite locations) spanning 25 countries. With continual investment in tailored local inventory, dedicated local experts, and flexible FMI® (Fastenal Managed Inventory) and digital solutions, we help our business partners achieve product and process savings across the supply chain – a "high-touch, high-tech" approach encapsulated by our tagline, Where Industry Meets Innovation™. Our local service teams are supported by 17 regional distribution centers, a captive logistics fleet, multiple teams of industry specialists and support personnel, and robust sourcing, quality, and manufacturing resources, enabling us to grow by getting closer to customers and providing innovative and comprehensive solutions to customer supply chain challenges.
Additional information regarding Fastenal is available on the Fastenal Company website at www.fastenal.com.
Cautionary Note Regarding Forward-Looking Statements
This press release contains statements that are not historical in nature and that are intended to be, and are hereby identified as, "forward looking statements" as defined in the Private Securities Litigation Reform Act of 1995, including a statement regarding expectations as to payment of a quarterly cash dividend in the foreseeable future. Any future determination as to payment of dividends will depend upon the financial condition and results of operations of the company and such other factors as are deemed relevant by the board of directors. For example, a change in business needs including working capital and funding for acquisitions, or a change in income tax law relating to dividends or stock repurchases, could cause the company to decide not to pay a dividend in the future or not to repurchase common stock pursuant to the existing share repurchase authorization. A discussion of other risks and uncertainties is included in the company's filings with the Securities and Exchange Commission, including our most recent annual report and subsequent quarterly reports. FAST-D
View source version on businesswire.com: https://www.businesswire.com/news/home/20240117764125/en/
Taylor Ranta Oborski
Financial Reporting & Regulatory Compliance Manager
507.313.7959
Source: Fastenal Company
FAQ
When will Fastenal's dividend of $0.39 per share be paid?
What types of dividends has Fastenal previously paid?
What is the total amount of dividends Fastenal has paid in the last ten years?
How many additional shares of common stock can Fastenal purchase under the current authorization?
