Updated 3/5/25

Amphenol Corporation (APH) is a global leader in interconnect and sensor technologies, providing essential components for industries ranging from communications and automotive to aerospace and industrial applications. As a massive $78 billion company, Amphenol has built a reputation for steady growth, strategic acquisitions, and strong financial performance.

For dividend investors, Amphenol may not be the first name that comes to mind since it doesn’t offer a high yield. However, it’s a company that prioritizes steady dividend growth, financial stability, and long-term value creation. While it may not be ideal for those looking for immediate high income, it’s a strong contender for investors focused on dividend growth rather than just the yield itself.

📊 Key Dividend Metrics

🔹 Forward Dividend Yield: 1.02%
🔹 Trailing Dividend Yield: 0.87%
🔹 5-Year Average Dividend Yield: 0.93%
🔹 Forward Annual Dividend Rate: $0.66 per share
🔹 Trailing Annual Dividend Rate: $0.55 per share
🔹 Payout Ratio: 28.65%
🔹 Ex-Dividend Date: March 18, 2025
🔹 Next Dividend Payment Date: April 9, 2025

Dividend Overview

Amphenol’s dividend isn’t the kind that will make income investors jump out of their seats. With a current yield just over 1%, it sits well below the yields of traditional income stocks. However, it’s a reliable payer with a long history of consistent dividend increases.

The company maintains a payout ratio of around 28%, meaning it uses less than a third of its earnings to fund dividends. This leaves plenty of room for reinvestment into growth initiatives while still allowing for future increases. If you’re looking for a company that prioritizes sustainable dividends over high payouts, Amphenol fits that mold.

Dividend Growth and Safety

One of the strongest aspects of Amphenol’s dividend strategy is its commitment to growth. The company has steadily increased its dividend over the years, even if the actual yield remains low.

A payout ratio under 30% suggests Amphenol isn’t stretching itself to meet dividend obligations. Instead, it keeps a healthy balance between rewarding shareholders and reinvesting in its business. Given that revenue has grown nearly 30% year-over-year, the company has plenty of financial flexibility to continue increasing its payouts in the years ahead.

Chart Analysis

The chart for Amphenol Corporation (APH) shows some interesting price action over the past year, reflecting a mix of bullish momentum followed by a clear shift in trend.

The stock saw a strong rally from mid-year, pushing higher above both its 50-day moving average (orange line) and 200-day moving average (blue line). This upward momentum lasted for several months, hitting new highs before beginning to fade.

A key turning point came when the 50-day moving average started curling downward, eventually crossing below the 200-day moving average. This kind of crossover is often seen as a bearish signal, suggesting a shift in sentiment from bullish to more cautious trading.

More recently, the stock has been trading below both moving averages, struggling to reclaim lost ground. The latest few candles show some volatility, with longer wicks on some of them, indicating battles between buyers and sellers. However, the price is still holding above the $60 level, which could act as a support zone for now.

Volume has remained fairly steady, but there are a few spikes, particularly during sell-offs. This suggests that larger players may have been taking profits or shifting their positions as the stock pulled back.

Looking at the Relative Strength Index (RSI) at the bottom, it appears to be in the neutral to slightly oversold range, meaning the stock isn’t heavily overbought but also hasn’t hit extreme oversold levels either.

The overall setup suggests that APH has lost some of its previous strength and is currently in a phase of consolidation or potential downside continuation. The next few weeks will be crucial in determining whether the stock can regain its footing or if sellers will continue to dominate.

Analyst Ratings

Amphenol Corporation (APH) has recently experienced a variety of analyst opinions, reflecting both optimism and caution. The consensus 12-month price target among analysts is approximately $79.12, suggesting potential upside from current levels.

Upgrades:

• William Stein of Truist Securities maintained a “Strong Buy” rating on January 23, 2025, raising the price target from $90 to $102. This bullish stance was attributed to Amphenol’s robust financial performance and strategic positioning in key markets.
• Mark Delaney of Goldman Sachs reiterated a “Strong Buy” rating on the same day, increasing the price target from $79 to $89, reflecting expectations of continued growth and profitability.

Downgrades:

• Wamsi Mohan of BofA Securities downgraded Amphenol from “Strong Buy” to “Hold” on September 4, 2024, reducing the price target from $80 to $71. This adjustment was due to concerns about potential design changes by major clients, which could impact Amphenol’s revenue streams.
• Credit Suisse downgraded the stock from “Outperform” to “Neutral” on May 22, 2023, lowering the price target from $91 to $77, citing valuation considerations and potential market headwinds.

These mixed analyst perspectives highlight the dynamic nature of Amphenol’s market position, influenced by both its internal performance and external market factors.

Earnings Report Summary

Amphenol Corporation wrapped up 2024 on a strong note, delivering impressive growth in both revenue and earnings. The company continues to show why it remains a leader in the interconnect and sensor space, with solid demand across multiple sectors.

Fourth Quarter Performance:

Sales for the final quarter came in at $4.3 billion, marking a solid 30% increase from the previous year. Even when accounting for currency fluctuations and acquisitions, organic growth still clocked in at 20%, which is no small feat. Earnings per share (EPS) followed suit, with GAAP diluted EPS landing at $0.59, reflecting a 44% jump compared to the same period last year. Adjusted EPS also showed strong momentum at $0.55, up 34% year-over-year.

Profitability remained strong, with operating margins staying firm at around 22%. On the cash flow side, Amphenol pulled in $847 million in operating cash flow and ended the quarter with $648 million in free cash flow, reinforcing its strong financial position.

Full-Year Results:

For the entire year, Amphenol reported $15.2 billion in revenue, representing 21% growth overall and 13% organic growth. The bottom line was just as impressive, with GAAP diluted EPS reaching $1.92, a 24% increase, while adjusted EPS climbed 25% to $1.89.

Operating margins remained stable, with GAAP margins at 20.7% and adjusted margins slightly higher at 21.7%. The company also generated $2.8 billion in operating cash flow for the year, with $2.2 billion in free cash flow, ensuring it has plenty of financial flexibility.

What’s Driving Growth?

A big part of Amphenol’s success in 2024 came from strategic acquisitions, including Carlisle Interconnect Technologies and Luetze, which helped expand its product offerings and market reach. The company also returned nearly $1.3 billion to shareholders through a combination of dividends and share repurchases, showing a strong commitment to rewarding investors.

From an industry perspective, the IT and datacom sectors were standout performers, contributing to the company’s revenue gains. Demand also remained strong in automotive, aerospace, and industrial applications, reinforcing Amphenol’s diversified revenue streams.

Looking at these numbers, it’s clear Amphenol continues to execute well on its long-term strategy, balancing growth, profitability, and shareholder returns while expanding into new opportunities.

Financial Health and Stability

Amphenol’s financials tell the story of a highly profitable and well-managed business. It boasts strong margins, consistent earnings growth, and a solid cash position.

✔️ Operating margin sits at 22.37%, showing the company’s ability to maintain profitability even in a competitive market.
✔️ Net profit margin of 15.92% indicates that a healthy chunk of revenue converts into actual profit.
✔️ Return on equity (ROE) at 26.71% highlights strong efficiency in using shareholder capital.

On the cash flow side, Amphenol is in great shape. Operating cash flow stands at $2.81 billion, providing more than enough flexibility to support its dividend, fund growth projects, and handle economic downturns.

The company does carry some debt, with a total debt-to-equity ratio of 73.86%. While this isn’t an alarming level, it’s something to keep an eye on, especially if interest rates continue to rise.

Valuation and Stock Performance

Amphenol is rarely a bargain stock, and that’s because investors are willing to pay a premium for quality. With a trailing price-to-earnings (P/E) ratio of 33.7 and a forward P/E of 28.2, it trades at a higher valuation than many other dividend stocks. However, these numbers reflect the company’s consistent earnings growth and its dominant position in a high-demand industry.

Here’s a snapshot of its recent stock performance:

✔️ 52-Week High: $79.39
✔️ 52-Week Low: $54.26
✔️ Current Price: $64.71 (as of March 5, 2025)
✔️ 50-Day Moving Average: $69.75
✔️ 200-Day Moving Average: $67.85

While the stock is trading below recent highs, it’s still well above its lows, signaling that investors remain confident in its long-term potential. The recent pullback could present an opportunity for long-term investors looking for quality at a slightly lower price.

Risks and Considerations

No stock is without risk, and Amphenol has a few factors worth considering before jumping in.

1️⃣ The low dividend yield means it may not appeal to income-focused investors. If your primary goal is generating high dividend income, there are better options out there.
2️⃣ The valuation is high compared to many dividend-paying stocks. While Amphenol has earned its premium, paying over 30 times earnings always comes with some level of risk.
3️⃣ As a supplier to cyclical industries like automotive and communications, its business can be affected by economic slowdowns. While it has weathered downturns well in the past, this is still a consideration.
4️⃣ The debt-to-equity ratio of 73.86% is manageable, but any increase in borrowing costs due to rising interest rates could impact profitability over time.

Final Thoughts

Amphenol isn’t a stock for yield-chasers, but for investors looking for a dividend growth story, it’s an attractive option. The company is financially strong, consistently increasing its dividend, and reinvesting for long-term expansion.

If you’re building a portfolio focused on steady, long-term wealth creation, Amphenol is a stock worth considering. It may not provide immediate high income, but its combination of growth, stability, and financial discipline makes it a solid holding for patient investors.