Updated April 2025
Toro might not be a household name in every investor’s portfolio, but if you’ve ever walked past a golf course or watched a landscaping crew at work, chances are you’ve seen its products in action. The company has built a solid reputation over the decades, producing everything from lawnmowers to irrigation systems and snow blowers. That steady, behind-the-scenes presence is exactly the kind of business model dividend-focused investors tend to appreciate—predictable, essential, and quietly profitable.
Lately, though, Toro has been navigating a few bumps. The stock is currently trading around $73.72, which puts it well below its 52-week high of just over $100. It’s not the only company feeling pressure—macro headwinds and shifts in consumer spending are showing up across the sector. But for long-haul investors who look past short-term noise, this could be a meaningful moment to reexamine what Toro brings to the table in terms of dividends and reliability.
Recent Events
Toro’s recent performance has been a bit mixed. On the surface, revenue over the last twelve months is sitting at $4.58 billion, down slightly from the year before. The bigger concern was on the earnings side, where net income fell over 18% year-over-year. A lot of that comes down to changing consumer trends post-pandemic and some pressure on certain retail-facing product lines.
Still, the company is operating from a position of strength. Operating margins are holding near 10%, and return on equity is sitting at nearly 27%, which is more than solid. Those numbers suggest management is still running a tight ship and using capital effectively, even in a less favorable environment.
On the balance sheet, total debt is around $1.22 billion, which puts the debt-to-equity ratio just above 83%. It’s a manageable number—not overly aggressive—but it’s something to keep in mind as borrowing costs stay elevated. Toro also holds around $171 million in cash. It’s not a huge reserve, but they make up for it with strong cash generation. Over the past year, operating cash flow hit $613 million, and free cash flow was just under $450 million.
Key Dividend Metrics
📈 Forward Dividend Yield: 2.09%
💵 Annual Dividend Rate: $1.52
🔁 5-Year Average Yield: 1.33%
📊 Payout Ratio: 37.34%
📆 Next Dividend Date: April 14, 2025
📅 Ex-Dividend Date: March 31, 2025
🌱 Dividend Growth (5-Year CAGR): Steady growth
📘 Dividend History: Paid uninterrupted since the 1980s
Dividend Overview
Toro’s dividend isn’t going to wow anyone with a huge yield, but it’s not meant to. The current yield is just over 2%, which actually stands higher than its five-year average. That’s an encouraging sign for investors who value getting more income for each dollar invested, especially when paired with a company known for operational consistency.
The payout ratio is sitting comfortably at 37%. That’s well within the sweet spot for sustainability—low enough to allow for reinvestment in the business but high enough to return real cash to shareholders. It’s the kind of balance dividend investors should want to see. More importantly, this is a company with a history of sticking to its dividend playbook. They’ve been paying one for decades without interruption, including through some pretty rocky economic stretches.
Dividend Growth and Safety
What really stands out about Toro’s dividend is how it aligns with the business’s cash generation. With over $600 million in operating cash flow and a relatively modest dividend commitment, the company isn’t stretching to make payments. Even after handling capex and interest, there’s plenty left over, which supports ongoing dividend growth.
Toro’s management has always taken a measured approach when it comes to allocating capital. They don’t chase big, splashy growth plays. Instead, they reinvest steadily, tuck in smaller acquisitions, and maintain a clear focus on profitability and returns. That shows up in the consistency of their dividend increases, which have been growing at a steady clip for years. It’s not flashy, but it’s the kind of reliable income story that many investors quietly value.
Even though the stock has seen a pullback recently, the underlying income engine remains strong. Cash flows are healthy, the balance sheet is under control, and the dividend continues to offer a dependable payout that has room to grow. Toro may not dominate headlines, but it certainly earns its place in a dividend-focused portfolio with its mix of stability, discipline, and quiet execution.
Balance Sheet Analysis
Toro’s balance sheet tells a story of steady growth mixed with a dose of fiscal muscle. Total assets hover just under $3.6 billion as of the end of fiscal 2024, climbing gradually over the past few years. Equity continues to expand as well, now at $1.55 billion, marking consistent reinvestment and retained earnings. The company holds strong working capital of nearly $789 million, giving it breathing room to manage operations without needing to juggle short-term debt or scramble during seasonal swings.
Debt has ticked up over the years, now at just over $1 billion, with net debt settling around $722 million—manageable given Toro’s size and reliable cash generation. Tangible book value has climbed to $602 million, a significant improvement from earlier years, which shows the underlying balance sheet is gaining real substance. One quirky detail? The number of shares issued has gently declined, likely thanks to ongoing buybacks. Toro might not be flashy, but it’s clearly comfortable with who it is—sort of like the guy at the BBQ who brings a well-worn but perfectly tuned lawn mower. Not trying to show off, just quietly getting the job done.
Cash Flow Statement
Toro’s cash flow picture over the trailing twelve months looks notably stronger than in previous years, thanks to a sharp rebound in operating cash flow, which hit $613.5 million. That’s nearly double what it posted just two years ago. Even after subtracting $103.5 million in capital expenditures, the company still managed to generate a healthy $510 million in free cash flow. That kind of consistency underlines the resilience of Toro’s business model, even as top-line growth slows.
On the financing side, Toro has been pulling back. It repurchased over $345 million in stock while dialing down debt issuance. No major repayments were recorded during the period, but the balance sheet still saw some easing in leverage. With $59.7 million in outflows on the investing side—far lower than prior years—management seems to be playing it cautious, focused on core operations rather than expansion. Despite these cash outflows, the company’s cash position remains stable at $177.7 million, proving they’re not exactly living paycheck to paycheck.
Chart Analysis
Price Trends and Moving Averages
Looking at the 1-year chart for TTC, the trend is clearly downward, with the price moving from the low $90s to below $75. The 50-day moving average (in red) has stayed below the 200-day moving average (in blue) for the majority of the year, signaling sustained bearish sentiment. There was a brief moment in early summer where the shorter average tried to curl upward, but the longer-term trend quickly took over again. This sort of moving average behavior often reflects persistent market caution, with buyers not yet confident enough to drive momentum over a longer horizon.
Volume Patterns and Activity
Volume has remained mostly steady, with a few noticeable spikes. The most eye-catching jump occurred in March, where volume surged dramatically—likely around an earnings release or significant news event. These bursts often reveal institutional positioning shifts or large-scale investor reactions. But even with that kind of action, price didn’t manage to break out of its broader downtrend. Most other volume bars stay well within a narrow band, which suggests that while interest in the name is stable, conviction remains low.
RSI and Momentum Signals
The Relative Strength Index (RSI) has bounced between overbought and oversold territory multiple times over the past year. Recently, it just moved sharply higher from the oversold region, hinting at a potential short-term reversal or relief rally. Earlier peaks in the RSI failed to coincide with sustainable gains, though, which makes this move worth watching, not necessarily following. The repeated dips into oversold territory reflect broader market hesitation, and while they can create attractive setups, the bigger picture here still leans cautious.
TTC appears to be trying to find a floor, but it hasn’t yet made a convincing case for a turnaround in price action. The moving averages and RSI movements suggest more consolidation may be needed before any trend shift gets underway.
Analyst Ratings
📊 In recent months, The Toro Company (TTC) has received a mixed bag of analyst opinions, reflecting a blend of cautious sentiment and longer-term optimism. As of late March 2025, five analysts are currently covering the stock with a consensus rating of “Moderate Buy.” That breakdown includes two “Hold” ratings, two “Buy” ratings, and one “Strong Buy.” The average 12-month price target is sitting at $89.75, which implies a decent upside from the current price near $72.50.
🔻 On March 7, 2025, one firm trimmed its price target for Toro from $88 down to $84, while maintaining a neutral view. The downgrade wasn’t dramatic but pointed to near-term softness in the company’s revenue outlook. Slower momentum in consumer-facing segments and some lingering inventory imbalances appear to be weighing on the short-term growth trajectory, leading to a more reserved stance.
🚀 A couple of weeks earlier, on February 24, 2025, another analyst team took the opposite approach—upgrading Toro from “Market Perform” to “Outperform” and placing a $100 price target on the stock. Their reasoning centered on improving demand trends in key end markets, along with confidence in Toro’s ability to execute on strategic growth plans that include both product innovation and geographic expansion.
🎯 The divergence in ratings reflects a company at a bit of a crossroads—balancing some near-term turbulence with underlying fundamentals that still look intact. While not every analyst is rushing to back up the truck, there’s still a clear thread of confidence in Toro’s longer-term position and cash flow-generating potential.
Earning Report Summary
Overall Snapshot
Toro’s most recent quarterly report painted a picture of a company navigating a mixed landscape. Net sales for the quarter came in at $995 million, just a notch below last year’s mark of about $1 billion. The slight dip wasn’t surprising given some softness in their residential segment—especially snow products and portable power tools—and the impact from selling off Pope Products. Even with that, Toro is keeping things relatively steady.
Professional Segment Holding Strong
The bright spot came from Toro’s professional segment. Sales there nudged up to around $769 million, a 1.6% increase. Golf and grounds equipment, along with zero-turn mowers, led the way. The earnings from this segment jumped to $127 million compared to $113 million the year before. Margins improved too, hitting 16.5%, up from 14.9%. That improvement came mostly from a better mix of products and solid gains in efficiency, showing that Toro knows how to squeeze more value from its strongest business lines.
Residential Segment Slows Down
Things weren’t quite as rosy in the residential segment. Sales fell 8% to $221 million, with snow gear and power equipment seeing lower shipments. Earnings dropped to $17.2 million from $23.5 million, and margins narrowed to 7.8%. Rising freight and material costs played a role here, and the company had to lean into promotions to help move product, which also squeezed profits a bit.
Margins and Cash Flow
Gross margin for the quarter came in at 33.7%, a little lower than last year’s 34.4%. Operating margins slipped too, from 8.8% down to 7.8%. Still, adjusted earnings per share held firm at 65 cents, just edging out last year’s 64 cents. It wasn’t a blowout quarter, but Toro managed to hold the line in some important areas.
Free Cash Flow and Capital Moves
Free cash flow saw a nice improvement. The company used $67.7 million in free cash during the quarter, which was better than the year before. Inventory levels came down by about 3%, which is a good sign they’re not overstocked. And Toro didn’t shy away from returning capital to shareholders, buying back $100 million worth of its own stock. It’s a clear signal the company feels confident in where it’s heading, even if the current environment is a bit choppy.
Management Team
At the helm of The Toro Company is Rick Olson, who serves as Chairman of the Board, President, and Chief Executive Officer. With a career at Toro that began in the 1980s, Olson has held several leadership roles over the decades, giving him a deep operational understanding of the business. His long tenure within the company signals stability and a clear strategic vision rooted in institutional knowledge.
Supporting Olson is Angela Drake, the Vice President and Chief Financial Officer, who took on the CFO role in 2023. Drake previously led financial and operational functions across different divisions within Toro, which gives her a strong grasp of both numbers and the real-world side of the business. Her financial leadership has been focused on improving margin efficiency and maintaining the company’s conservative fiscal approach.
Other key players include Blake Grams, Vice President of Global Operations, who is responsible for overseeing manufacturing and supply chain management. His work ensures product delivery is efficient and consistent across the company’s wide range of markets. Together, this executive team blends continuity with operational discipline, and that has served the company well through both growth cycles and market slowdowns.
Valuation and Stock Performance
Toro shares are currently trading at around $73.89, marking a modest pullback over the last year. The stock peaked just above $100 within the past 12 months but has since faced pressure, largely driven by softening in the residential equipment segment and broader macroeconomic headwinds. Its current market cap sits near $7.2 billion, placing it firmly within the mid-cap category.
Earnings have held relatively steady despite the turbulence, with adjusted diluted EPS for the most recent quarter coming in at 65 cents, slightly higher than the same quarter last year. While the company saw a dip in overall revenue, the professional segment performed well and helped balance out weaker results from residential.
Analyst sentiment remains cautiously upbeat. The consensus price target is just under $90, implying some room for appreciation. Still, opinions are split, with some analysts pointing to short-term challenges such as lingering inventory overhang and margin pressure in the consumer segment. Longer-term, Toro’s stable cash flow and continued investment in innovation could offer a compelling path forward, especially if demand trends normalize.
Risks and Considerations
Like any business, Toro carries its share of risks. One of the more pressing issues is its seasonal nature. A big chunk of Toro’s revenue comes during peak lawn care and snow seasons, which makes it more sensitive to weather shifts and consumer buying patterns. A mild winter or soggy spring can easily dent sales in certain segments.
The residential market, in particular, has become a source of concern lately. Post-pandemic demand spikes are tapering off, and with consumers pulling back on discretionary purchases, there’s added pressure on this side of the business. That’s where most of the recent softness has come from, and it could continue if economic uncertainty sticks around.
On the cost front, freight and materials have become a pain point. Like many manufacturers, Toro has been dealing with higher input costs and supply chain delays. That’s taken a bite out of margins, particularly in categories where promotional pricing was needed to move product. It’s a margin squeeze the company is actively managing, but it’s still there.
Lastly, Toro’s international exposure introduces the usual mix of currency volatility, regulatory hurdles, and geopolitical risk. While these aren’t unique to Toro, they’re still important to keep in mind, especially with parts of the global economy moving at very different speeds.
Final Thoughts
Toro has a lot going for it. The company has a strong brand, a wide-reaching product line, and leadership with deep company roots. Its professional equipment division continues to perform well, and cash flow generation remains solid even as certain segments face short-term pressure.
What stands out most is the company’s ability to maintain discipline in its operations. Even when sales soften or input costs rise, Toro has shown a consistent ability to adapt, protect profitability, and return value to shareholders through buybacks and dividends.
Still, this is a business that does face real challenges. The current environment for consumer goods is tough, and some of the post-COVID tailwinds are fading. That means investors need to watch carefully for signs of stabilization in residential and continued strength in pro segments.
In the end, Toro doesn’t need to reinvent itself. Steady execution, thoughtful capital allocation, and a focus on high-quality products have been its formula for decades. If that continues, it should remain a reliable player in the world of outdoor solutions, with or without perfect weather.