Advertisement
U.S. markets closed
  • S&P 500

    5,254.35
    +5.86 (+0.11%)
     
  • Dow 30

    39,807.37
    +47.29 (+0.12%)
     
  • Nasdaq

    16,379.46
    -20.06 (-0.12%)
     
  • Russell 2000

    2,124.55
    +10.20 (+0.48%)
     
  • Crude Oil

    83.05
    +1.70 (+2.09%)
     
  • Gold

    2,243.70
    +31.00 (+1.40%)
     
  • Silver

    24.99
    +0.24 (+0.96%)
     
  • EUR/USD

    1.0790
    -0.0040 (-0.37%)
     
  • 10-Yr Bond

    4.2060
    +0.0100 (+0.24%)
     
  • GBP/USD

    1.2623
    -0.0015 (-0.12%)
     
  • USD/JPY

    151.3750
    +0.1290 (+0.09%)
     
  • Bitcoin USD

    70,731.17
    +1,850.55 (+2.69%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,952.62
    +20.64 (+0.26%)
     
  • Nikkei 225

    40,168.07
    -594.66 (-1.46%)
     

Is American Software Inc (NASDAQ:AMSW.A) An Attractive Dividend Stock?

Dividends can be underrated but they form a large part of investment returns, playing an important role in compounding returns in the long run. Over the past 10 years, American Software Inc (NASDAQ:AMSW.A) has returned an average of 5.00% per year to shareholders in terms of dividend yield. Does American Software tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis. View our latest analysis for American Software

How I analyze a dividend stock

Whenever I am looking at a potential dividend stock investment, I always check these five metrics:

  • Is their annual yield among the top 25% of dividend payers?

  • Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?

  • Has dividend per share amount increased over the past?

  • Can it afford to pay the current rate of dividends from its earnings?

  • Will it have the ability to keep paying its dividends going forward?

NasdaqGS:AMSW.A Historical Dividend Yield Apr 30th 18
NasdaqGS:AMSW.A Historical Dividend Yield Apr 30th 18

Does American Software pass our checks?

American Software has a trailing twelve-month payout ratio of 62.33%, which means that the dividend is covered by 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. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. In the case of AMSW.A it has increased its DPS from $0.36 to $0.44 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. This is an impressive feat, which makes AMSW.A a true dividend rockstar. Relative to peers, American Software generates a yield of 3.47%, which is high for Software stocks but still below the market’s top dividend payers.

Next Steps:

Keeping in mind the dividend characteristics above, American Software is definitely worth considering for investors looking to build a dedicated income portfolio. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. I’ve put together three important aspects you should look at:

  1. Future Outlook: What are well-informed industry analysts predicting for AMSW.A’s future growth? Take a look at our free research report of analyst consensus for AMSW.A’s outlook.

  2. Valuation: What is AMSW.A 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 AMSW.A is currently mispriced by the market.

  3. Other 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 pass 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.

Advertisement