Thales Raises Dividend After Earnings Rise: A Win-Win for Investors

Thales, the global leader in advanced technologies, has announced a dividend increase following a strong earnings performance in 2024. The company's Board of Directors decided to distribute an interim ordinary cash dividend of €0.85 per share for the current 2024 financial year, with an ex-dividend date of Dec 3, 2024, and a pay date of Dec 5, 2024. This move comes as Thales continues to deliver robust financial results, driven by its strong order intake and sales growth.



Thales' dividend increase reflects the company's commitment to returning value to shareholders while maintaining a strong financial position. The dividend yield of 0.46% may not be as high as some of its peers in the aerospace and defense industry, but it is a testament to the company's focus on reinvesting in its business for future growth. Thales' payout ratio of 50.30% indicates that the company is distributing a significant portion of its earnings as dividends while also retaining enough capital to fund its growth initiatives.



The key drivers behind Thales' earnings growth and dividend increase include:

1. Strong order intake and sales growth: Thales achieved a record order intake of over €25 billion in 2024, up 9% from the previous year, with a book-to-bill ratio above 1. Sales also grew by 11.7% to over €20 billion, with organic growth of 8.3%. This robust growth was supported by strong demand in the Defence segment and continued momentum in the Aerospace segment.
2. Improved operating leverage: Thales demonstrated its ability to generate profitable growth, with an increase in EBIT in absolute terms and as a percentage. The adjusted EBIT margin improved to 11.8% in 2024, up from 11.6% in 2023, reflecting the strength of its operating leverage.
3. Cash flow generation: Thales generated free operating cash flow from continuing operations of €2,142 million in 2024, up 9% from the previous year. The cash conversion ratio of adjusted net income into operating free cash flow was 114%, reflecting the excellent momentum of new orders and the Group's mobilization of its CA$H! plan.

Thales' dividend increase is a win-win for investors, as it provides a steady income stream while the company continues to grow and reinvest in its business. The company's strong financial performance, strategic acquisitions, and commitment to R&D investments further support the sustainability of these trends in the long term. As Thales continues to execute on its strategic roadmap and deliver on its 2025 objectives, investors can expect the company to maintain its dividend growth trajectory and create value for shareholders.

In conclusion, Thales' dividend increase is a reflection of the company's strong financial performance and commitment to returning value to shareholders. With a focus on reinvesting in its business for future growth, Thales is well-positioned to continue delivering robust earnings growth and dividend increases in the long term. Investors should consider Thales as a reliable dividend stock with a strong growth potential.