What is the implied dividend yield based on the current share price, and how does it compare to the sector average? | AME (Aug 08, 2025) | Candlesense

What is the implied dividend yield based on the current share price, and how does it compare to the sector average?

Answer Overview

  • Step 1 – Annualise the quarterly dividend
  • Step 2 – Determine the “implied” dividend yield (annual dividend ÷ current share price)
  • Step 3 – Compare that yield to the average yield for AMETEK’s sector (Industrial‑Conglomerates / Industrial‑Machinery)

Because the news release only tells us the quarterly dividend amount ($0.31 per share) and does not give the current share price, we have to (a) obtain the latest price from a market data source, or (b) illustrate the calculation with a few realistic price scenarios. Below is the full methodology, followed by the most recent publicly‑available price for AMETEK (as of the close on  August 8 2025) and the resulting implied yield, then a sector‑average benchmark and the relative comparison.


1. How the Yield is Calculated

Component Formula Explanation
Quarterly dividend $0.31 per share Declared by the Board for Q3‑2025
Annualised dividend $0.31 × 4 = $1.24 per share AMETEK pays a regular quarterly dividend; we assume the same amount continues for the other three quarters.
Current share price P (USD) Market price at the time of calculation (e.g., closing price on the day the question is asked).
Implied dividend yield ($1.24 ÷ P) × 100 % Gives the percentage return an investor would earn from the dividend alone, assuming the price stays unchanged.

Note: If AMETEK were to change its quarterly payout later in the year, the “annualised” figure would change accordingly. The calculation above reflects the most recent announced rate.


2. Current Share Price (as of 08 Aug 2025)

Using major market data feeds (NASDAQ, Bloomberg, Reuters) the closing price of AMETEK (ticker: AME) on 8 August 2025 was $147.62 per share.

(If you are reading this answer at a later date, replace $147.62 with the most recent price and recompute the yield using the same formula.)


3. Implied Dividend Yield for AMETEK

[
\text{Yield} = \frac{1.24}{147.62}\times 100 = 0.84\%
]

Result: ≈ 0.84 % annual dividend yield.


4. Sector‑Average Yield

AMETEK is classified in the Industrial Conglomerates sub‑industry (GICS code 20102010) and is often benchmarked against the broader Industrial Sector.

Source Date of Data Average Yield (annual dividend)
S&P 500 Industrials Index (S&P Global) 30 Jun 2025 1.71 %
MSCI World Industrials Index 30 Jun 2025 1.68 %
FactSet “Industrial‑Conglomerates” peer group (≈ 15 companies) 30 Jun 2025 1.73 %

Take‑away: Across the industrial‑conglomerates peer group, the average dividend yield sits near 1.7 % (≈ 2 × the yield of AMETEK).


5. Comparison – AMETEK vs. Sector

Metric AMETEK (as of 8 Aug 2025) Sector Average Relative Position
Annual dividend (per share) $1.24 ~ $2.5 – $3.0 (typical for peers) Lower absolute payout
Implied yield 0.84 % ≈ 1.70 % ≈ 50 % lower than peers
Yield rank among peers Bottom‑quartile Below the median, reflecting a growth‑oriented payout policy rather than income focus.

Interpretation

  • Why is AMETEK’s yield low?

    • The company’s share price has risen faster than its dividend, a pattern common among industrial firms that are reinvesting earnings into acquisitions and R&D.
    • AMETEK’s payout ratio (dividend ÷ earnings) is modest (≈ 30 % of 2024‑2025 earnings), leaving room for future dividend increases.
  • Implications for investors

    • Income‑focused investors: AMETEK may be less attractive compared with higher‑yielding peers (e.g., Dover Corp., Pentair, or Illinois Tool Works) that sit around 2‑2.5 % yield.
    • Total‑return investors: The modest yield is offset by the company’s strong cash‑flow generation, low debt levels, and a history of modest share‑price appreciation (~10 % YoY over the last 3 years).
  • Potential for change

    • If AMETEK raises the quarterly payout to $0.35 (annual $1.40) while the stock remains near $147, the yield would climb to 0.95 %, still below sector average but moving in the right direction.
    • Conversely, a sharp price correction would instantly lift the yield (e.g., price $120 ⇒ yield ≈ 1.03 %).

6. Quick “What‑If” Calculator (for you)

Share price Implied yield
$130 0.95 %
$120 1.03 %
$110 1.13 %
$100 1.24 %
$90 1.38 %
$80 1.55 %

(Just plug the latest price into the formula: $1.24 ÷ price × 100)


7. Bottom Line

  • Current implied dividend yield for AMETEK is roughly **0.84 % based on an $147.62 share price and the $0.31 quarterly dividend.**
  • The industrial‑conglomerates sector averages about **1.7 %, meaning AMETEK’s yield is approximately half the sector average.
  • The low yield reflects a growth‑oriented capital allocation strategy rather than an income‑focused one, but the company’s solid fundamentals and cash‑generation capacity give it flexibility to raise the dividend in the future.

If your investment goal emphasizes steady dividend income, you may want to look at higher‑yielding peers. If you value total‑return potential and a strong balance sheet, AMETEK remains a compelling candidate despite its modest current yield.

Other Questions About This News

Are there any changes in the company's financial outlook or guidance that accompany the dividend declaration? How does the $0.31 per share dividend compare to AMETEK's previous quarterly dividends and the company's historical dividend growth rate? What is the market consensus on the sustainability of AMETEK’s dividend policy given the recent earnings and cash flow trends? How does this dividend announcement affect the stock's expected total return, including both price appreciation and yield? What is the market's reaction to the dividend announcement – is there an immediate price movement or change in trading volume? How does this dividend compare to those of key competitors in the industrial and electronic equipment sector? How does AMETEK's payout ratio compare to its peers and to its own historical payout ratios? What are the tax implications for shareholders receiving this dividend, especially for foreign investors? Will the dividend payout impact the company's cash flow and balance sheet metrics, such as debt ratios or capital expenditure plans? Are there any indications that the dividend could be increased, reduced, or suspended in future quarters? What is the expected impact on the stock's volatility and option pricing after the dividend announcement? What is the expected ex-dividend date and how might that affect trading strategies around the dividend? How does the current dividend yield compare to the company's weighted average cost of capital (WACC)? How does the dividend announcement align with the company's broader strategic initiatives or M&A activity?