eXp World Holdings (NASDAQ:EXPI) Has Announced A Dividend Of $0.05
eXp World Holdings, Inc. (NASDAQ:EXPI) will pay a dividend of $0.05 on the 29th of March. This payment means the dividend yield will be 1.7%, which is below the average for the industry.
See our latest analysis for eXp World Holdings
eXp World Holdings Is Paying Out More Than It Is Earning
It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable. eXp World Holdings is not generating a profit, but its free cash flows easily cover the dividend, leaving plenty for reinvestment in the business. In general, cash flows are more important than the more traditional measures of profit so we feel pretty comfortable with the dividend at this level.
Earnings per share is forecast to rise by 116.1% over the next year. However, if the dividend continues along recent trends, it could start putting pressure on the balance sheet with the payout ratio getting very high over the next year.
eXp World Holdings Doesn't Have A Long Payment History
The dividend has been pretty stable looking back, but the company hasn't been paying one for very long. This makes it tough to judge how it would fare through a full economic cycle. The dividend has gone from an annual total of $0.16 in 2021 to the most recent total annual payment of $0.20. This means that it has been growing its distributions at 7.7% per annum over that time. Investors will likely want to see a longer track record of growth before making decision to add this to their income portfolio.
The Company Could Face Some Challenges Growing The Dividend
The company's investors will be pleased to have been receiving dividend income for some time. It's encouraging to see that eXp World Holdings has been growing its earnings per share at 29% a year over the past five years. The company hasn't been turning a profit, but it running in the right direction. If this trajectory continues and the company can turn a profit soon, it could bode well for the dividend going forward.
Our Thoughts On eXp World Holdings' Dividend
In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about eXp World Holdings' payments, as there could be some issues with sustaining them into the future. The company is generating plenty of cash, which could maintain the dividend for a while, but the track record hasn't been great. We don't think eXp World Holdings is a great stock to add to your portfolio if income is your focus.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. As an example, we've identified 1 warning sign for eXp World Holdings that you should be aware of before investing. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.
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