Income Investors Can Sleep Well With MSA’s Dividend Despite 2023 Cash Flow Scare

Core Viewpoint - MSA Safety has demonstrated a strong commitment to maintaining its dividend, even during challenging cash flow conditions, indicating resilience and potential for future growth [2][5][6]. Dividend Performance - MSA Safety pays an annual dividend of $2.08 per share, yielding 1.28% [2]. - The company has delivered 53 consecutive quarterly payments, with the most recent increase being 3.9% in Q2 2025 [2]. - The 5-year growth rate of the dividend stands at 4.2% CAGR [2]. Payout Ratios - The earnings payout ratio is 29.3%, indicating that 71% of profits are retained for reinvestment or debt reduction [3]. - In 2024, the free cash flow (FCF) payout ratio was 32.5%, while in 2023, it spiked to 147% due to cash flow challenges [4][5]. Cash Flow Analysis - In 2024, MSA generated $296.4 million in operating cash flow and $242.2 million in free cash flow, with dividend payments totaling $78.8 million [4]. - In 2023, operating cash flow dropped to $92.9 million, leading to a free cash flow of $50.1 million, which was insufficient to cover dividend payments [5]. Balance Sheet Strength - MSA has a total debt of $674 million against $1.30 billion in shareholders' equity, resulting in a debt-to-equity ratio of 0.52x [8]. - The net debt stands at approximately $504 million, with a net debt-to-EBITDA ratio of around 1.0x, indicating a conservative financial position [8].