10 Biggest Dividend Cuts and Suspensions of 2024

3. The Estée Lauder Companies Inc. (NYSE:EL)

Number of Hedge Fund Holders: 49

The Estée Lauder Companies Inc. (NYSE:EL) is an American multinational cosmetics company that offers a wide range of related products and services. Due to the complexities of the prestige beauty market, including the challenges in predicting the timing of recovery in mainland China and Asia travel retail, the company slashed its dividend to a more suitable payout ratio. This reduction also provides greater financial flexibility for the incoming leadership team to accelerate the company’s profitable growth. The company still considers dividends an important part of its capital allocation strategy, provided the payout ratio is appropriate.

In fiscal Q1 2025, The Estée Lauder Companies Inc. (NYSE:EL) reported revenue of $3.36 billion, down by 4.5% from the same period last year. Despite its challenges, the company is working to overcome its struggles. It has seen strong organic sales growth in the Skin Care category, particularly in the EMEA markets, driven by the popularity of its night-time innovations. In addition, the company achieved significant share gains in prestige Skin Care in China for the second consecutive quarter, led by La Mer. The company has also advanced its strategy to capitalize on the growth opportunities in Fragrance. It expanded the reach of its luxury and artisanal portfolio and launched BALMAIN Beauty, aiming to solidify its strategic position in the luxury Fragrance market. This was reflected in the quarter when the company became the top-ranked player in Japan’s Fragrance category, driven by Le Labo and Jo Malone London.

The Estée Lauder Companies Inc. (NYSE:EL) ended the quarter with $2.35 billion available in cash and cash equivalents. During the quarter, it returned $0.24 billion to shareholders through dividends. The company pays a quarterly dividend of $0.35 per share for a dividend yield of 1.88%, as of December 22.

As per Insider Monkey’s database of Q3 2024, 49 hedge funds owned stakes in The Estée Lauder Companies Inc. (NYSE:EL), up from 47 in the previous quarter. These stakes have a consolidated value of over $1.87 billion. Among these hedge funds, D E Shaw was the company’s leading stakeholder in Q3.