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NortonLifeLock (NASDAQ:NLOK) Has Affirmed Its Dividend Of US$0.13

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  • NLOK

The board of NortonLifeLock Inc. (NASDAQ:NLOK) has announced that it will pay a dividend on the 15th of September, with investors receiving US$0.13 per share. The dividend yield will be 1.9% based on this payment which is still above the industry average.

See our latest analysis for NortonLifeLock

NortonLifeLock's Payment Has Solid Earnings Coverage

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. The last dividend was quite easily covered by NortonLifeLock's earnings. This means that a large portion of its earnings are being retained to grow the business.

Looking forward, earnings per share is forecast to rise by 16.9% over the next year. If the dividend continues along recent trends, we estimate the payout ratio will be 32%, which is in the range that makes us comfortable with the sustainability of the dividend.

historic-dividend
historic-dividend

NortonLifeLock's Dividend Has Lacked Consistency

NortonLifeLock has been paying dividends for a while, but the track record isn't stellar. This suggests that the dividend might not be the most reliable. Since 2013, the first annual payment was US$0.60, compared to the most recent full-year payment of US$0.50. Doing the maths, this is a decline of about 2.3% per year. A company that decreases its dividend over time generally isn't what we are looking for.

The Dividend Looks Likely To Grow

Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. It's encouraging to see NortonLifeLock has been growing its earnings per share at 43% a year over the past five years. NortonLifeLock is clearly able to grow rapidly while still returning cash to shareholders, positioning it to become a strong dividend payer in the future.

We Really Like NortonLifeLock's Dividend

Overall, we like to see the dividend staying consistent, and we think NortonLifeLock might even raise payments in the future. Distributions are quite easily covered by earnings, which are also being converted to cash flows. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Just as an example, we've come across 3 warning signs for NortonLifeLock you should be aware of, and 1 of them is potentially serious. If you are a dividend investor, you might also want to look at our curated list of high performing dividend stock.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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