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ITT retains 77% of earnings with a 23% payout ratio and 4.2x free cash flow coverage of dividends.
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The company grew its dividend at a 19% annual rate over five years while maintaining ultra-low payout ratios.
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ITT carries a 0.41x debt to equity ratio and 22x interest coverage with $516M cash on hand.
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ITT Inc (NYSE: ITT) pays a modest dividend that won’t excite income investors chasing yield, but the numbers behind it tell a story of exceptional safety. With a 0.76% yield and $1.372 in annual dividends per share, this industrial manufacturer has built one of the most conservative payout structures in its sector.
|
Metric |
Value |
|---|---|
|
Annual Dividend |
$1.372 per share |
|
Dividend Yield |
0.76% |
|
Consecutive Years of Increases |
14+ years |
|
Most Recent Increase |
10.0% (Q4 2024) |
|
Dividend Aristocrat Status |
No |
ITT’s dividend safety starts with remarkably low payout ratios. The company earned $5.99 per share over the trailing twelve months while paying just $1.372 in dividends, translating to an earnings payout ratio of 22.9%. ITT retains more than three quarters of its profits.
In 2024, ITT generated $438.2 million in free cash flow (operating cash flow of $562.1 million minus capital expenditures of $123.9 million) and paid $104.7 million in dividends. That’s a free cash flow payout ratio of just 23.9%, giving the company 4.2 times coverage of its dividend obligations.
This infographic highlights ITT Inc.’s strong financial position and consistent dividend growth, earning it a ‘Very Safe’ dividend safety rating. It details a low payout ratio, robust cash flow, and conservative debt metrics, indicating the company could potentially double its dividend.
|
Metric |
TTM Value |
Assessment |
|---|---|---|
|
Earnings Payout Ratio |
22.9% |
Very Healthy |
|
FCF Payout Ratio |
23.9% |
Very Healthy |
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Operating Cash Flow Coverage |
5.4x |
Strong |
These ratios remained stable even as ITT grew the dividend at a 19% compound annual rate over the past five years. The company increased its quarterly payment from $0.319 to $0.351 in early 2025, a 10% raise that barely moved the payout ratio.
ITT carries $1.084 billion in total debt against $2.665 billion in shareholders’ equity, producing a debt to equity ratio of just 0.41x. With EBITDA of $815.3 million, the company generates more than enough cash flow to service its obligations comfortably.
