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Is ClearOne Inc (NASDAQ:CLRO) A Smart Choice For Dividend Investors?

A large part of investment returns can be generated by dividend-paying stock given their role in compounding returns over time. ClearOne Inc (NASDAQ:CLRO) has returned to shareholders over the past 3 years, an average dividend yield of 2.00% annually. Does ClearOne tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis. See our latest analysis for ClearOne

5 questions to ask before buying a dividend stock

When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:

  • 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 amount increased over the past?

  • Is its earnings sufficient to payout dividend at the current rate?

  • Will the company be able to keep paying dividend based on the future earnings growth?

NasdaqCM:CLRO Historical Dividend Yield May 16th 18
NasdaqCM:CLRO Historical Dividend Yield May 16th 18

How does ClearOne fare?

ClearOne has a negative payout ratio, which means that it is loss-making, and paying its dividend from its retained earnings. Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. The reality is that it is too early to consider ClearOne 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, ClearOne generates a yield of 4.67%, which is high for Communications stocks.

Next Steps:

Now you know to keep in mind the reason why investors should be careful investing in ClearOne 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. There are three fundamental aspects you should look at:

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

  2. Historical Performance: What has CLRO’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.

  3. 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.

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