What portion of free cash flow is being allocated to the dividend versus organic reinvestment and growth projects?
Answer Overview
Based on the press release you provided, Ralliant Corp. announced a quarterly cash dividend of $0.05 per share and reiterated its focus on “organic reinvestment” and “growth projects.” However, the release does not disclose any quantitative information about:
- Total free cash flow (FCF) generated by the company for the period in question (or a recent fiscal quarter/year), nor
- The dollar amount the Board intends to allocate to reinvestment or growth initiatives.
Because the required numbers are missing, we cannot calculate an exact percentage (or “portion”) of free cash flow that is being directed to the dividend versus organic reinvestment and growth projects.
Below is a step‑by‑step guide on how you could determine that allocation if you obtain the missing data from Ralliant’s publicly filed financial statements (e.g., 10‑Q or 10‑K) or earnings releases.
1. Gather the Needed Numbers
| Required Metric | Where to Find It |
|---|---|
| Free Cash Flow (FCF) for the most recent period (quarterly or annual) | • Ralliant’s Form 10‑Q (quarterly) or Form 10‑K (annual) → Statement of Cash Flows (Operating cash flow – Capital expenditures) • Investor presentations or earnings call transcripts that sometimes provide a “Free cash flow” slide. |
| Total dividend cash outflow for the same period | • Press release (gives per‑share amount). Multiply by the number of shares outstanding (found in the Balance Sheet or “Common Stock – Shares Outstanding” footnote). • The cash‑flow statement often lists “Dividends paid” under financing activities. |
| Reinvestment / growth‑project spend | • Capital expenditures (CapEx) in the cash‑flow statement (often a proxy for reinvestment). • “Strategic investments,” “acquisitions,” or “R&D” line items disclosed in MD&A or footnotes. |
2. Calculate the Allocation Ratios
Assuming you have the three numbers above:
Dividend Allocation Ratio
[
\text{Dividend % of FCF} = \frac{\text{Total dividend cash outflow}}{\text{Free cash flow}} \times 100
]Reinvestment / Growth Allocation Ratio
[
\text{Reinvestment % of FCF} = \frac{\text{CapEx (or total strategic spend)}}{\text{Free cash flow}} \times 100
]Residual / Other Uses (if any)
[
\text{Other % of FCF} = 100\% - (\text{Dividend %} + \text{Reinvestment %})
]
3. Illustrative Example (Using Hypothetical Numbers)
| Metric | Hypothetical Value |
|---|---|
| Free cash flow (quarter) | $120 million |
| Shares outstanding (approx.) | 250 million |
| Quarterly dividend per share | $0.05 |
| Total dividend cash outflow | $0.05 × 250 M = $12.5 million |
| Capital expenditures (quarter) | $30 million |
Ratios
- Dividend = $12.5 M / $120 M ≈ 10.4 % of FCF
- Reinvestment = $30 M / $120 M ≈ 25.0 % of FCF
- Remaining cash (e.g., debt repayment, share buy‑backs, cash buffer) ≈ 64.6 % of FCF
Note: The above calculations are purely illustrative; you would replace the numbers with Ralliant’s actual reported figures.
4. How to Find the Numbers Quickly
- SEC EDGAR – Search for “Ralliant Corp” → filter for 10‑Q/10‑K filed for the quarter ending June 30 2025 (or the most recent filing).
- Investor Relations Website – Look for “Quarterly Results” or “Financial Highlights” PDFs; they often summarize FCF and dividend payouts.
- Earnings Call Transcripts – Services like Seeking Alpha, Bloomberg, or FactSet often provide a transcript; management may disclose the dividend payout ratio or the amount allocated to growth projects.
- Analyst Reports – Equity research may have already computed the dividend‑to‑FCF ratio for you.
5. Bottom‑Line Answer to Your Question
Based on the information in the press release alone, we cannot determine what portion of Ralliant’s free cash flow is being allocated to the dividend versus organic reinvestment and growth projects. The release only tells us the dividend amount ($0.05 per share) and that the company is “making progress” on its capital‑allocation priorities, but it does not disclose the total free cash flow amount or the dollar value earmarked for reinvestment.
To obtain a precise allocation breakdown, you will need to:
- Retrieve Ralliant’s most recent free cash flow figure from its SEC filings or earnings materials.
- Calculate the total cash outlay for the dividend (per‑share dividend × shares outstanding).
- Identify the cash spent on capital expenditures or other growth‑related initiatives.
- Compute the percentages as shown in the step‑by‑step guide above.
Once those numbers are in hand, you can readily answer the original question with exact percentages. If you gather the relevant figures and would like help performing the calculations, feel free to share them and I’ll walk you through the math.