NetApp’s Dividend (NASDAQ:NTAP), Will Be $0.50
NetApp, Inc. (NASDAQ:NTAPOn the 25th January, ), will pay $0.50 as a dividend. Based on this payment, the dividend yield will be 3.4%. This is still higher than industry average.
View our latest analysis for NetApp
NetApp’s payment has solid earnings coverage
While we like strong dividend yields, it doesn’t mean that the payments aren’t sustainable. But, NetApp’s dividend was covered comfortably by both earnings and cash flow prior to this announcement. It means that the majority of NetApp’s earnings are being retained in order to grow the company.
EPS is expected to decline by 26.7% over the next year. If current trends continue, the payout ratio could reach 47%. We consider this to be very comfortable with the majority of the company’s earnings remaining to grow the business.
NetApp Has A Solid Track Record
The company has a steady record of paying dividends, with very little fluctuation. In 2012, the annual payment was $0.60 and in 2012 it was $2.00. The most recent fiscal year payment was $2.00. This is a compound annual rate of growth (CAGR) that averages approximately 13% per year. The payments show a very positive upward momentum and have not faltered, which gives some hope that future payments are also reliable.
The Dividend is likely to grow
It will please the investors that they have been receiving dividend income over the past few years. NetApp has seen a 24% increase in earnings per share over the past five year. It is encouraging. We believe that NetApp could be a great dividend stock, given its high earnings and low payout ratio.
NetApp Looks Like A Great Dividend Stock
It is encouraging to see the dividend staying steady, and there is no reason to believe this will change in the medium-term. The company generates plenty of cash and the earnings cover all distributions. The earnings are expected to decline over the next 12 month. This won’t cause any problems if it doesn’t become a pattern, but it could create some volatility in the next one year. We believe this stock has solid potential to be a dividend stock, considering all of these factors.
Market movements are a testament to the value of a consistent dividend program versus one that is unpredictable. But, before you invest capital in a stock, there are some other things that readers need to be aware of. NetApp offers this service. 2 warning signs (and 1 which can’t be ignored) We think there are some things you should know. Are you looking for high-yielding dividend options? Check out our collection of strong dividend payers.
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This article is by Simply Wall St. It is general in nature. We only provide commentary on historical data and analyst projections. Our articles are not meant to be considered financial advice. It is not a recommendation not to buy or sell any stocks and does not consider your financial situation or objectives. We strive to deliver long-term, targeted analysis that is based on fundamental data. Please note that our analysis might not include the most recent announcements from price-sensitive companies or qualitative material. Simply Wall St holds no position in any of the stocks mentioned.
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