4 Days Left Before Sapiens International Corporation NV (NASDAQ:SPNS) Will Be Trading Ex-Dividend,
Important news for shareholders and potential investors in Sapiens International Corporation NV (NASDAQ:SPNS): The dividend payment of US$0.20 per share will be distributed to shareholders on 30 October 2018, and the stock will begin trading ex-dividend at an earlier date, 15 October 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Sapiens International’s latest financial data to analyse its dividend characteristics.
View our latest analysis for Sapiens International
Here’s how I find good dividend stocks
When researching a dividend stock, I always follow the following screening criteria:
Is it paying an annual yield above 75% of dividend payers?
Has it paid dividend every year without dramatically reducing payout in the past?
Has dividend per share risen in the past couple of years?
Can it afford to pay the current rate of dividends from its earnings?
Will the company be able to keep paying dividend based on the future earnings growth?
Does Sapiens International pass our checks?
Sapiens International has a trailing twelve-month payout ratio of 90%, meaning the dividend is not sufficiently covered by its earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward.
When assessing the forecast sustainability of a dividend it is also worth considering the cash flow of the business. Companies with strong cash flow can sustain a higher payout ratio, while companies with weaker cash flow generally cannot.
If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. The reality is that it is too early to consider Sapiens International as a dividend investment. It has only been consistently paying dividends for 3 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.
In terms of its peers, Sapiens International generates a yield of 1.6%, which is high for Software stocks but still below the market’s top dividend payers.
Next Steps:
After digging a little deeper into Sapiens International’s yield, it’s easy to see why you should be cautious investing in the company just for the dividend. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. Given that this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. I’ve put together three essential aspects you should further research:
Future Outlook: What are well-informed industry analysts predicting for SPNS’s future growth? Take a look at our free research report of analyst consensus for SPNS’s outlook.
Valuation: What is SPNS worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether SPNS is currently mispriced by the market.
Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
