NVE Corp's Dividend Analysis
Understanding the Dividend Prospects of NVE Corp
NVE Corp (NASDAQ:NVEC) recently announced a dividend of $1 per share, payable on 2024-02-28, with the ex-dividend date set for 2024-01-26. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into NVE Corp's dividend performance and assess its sustainability.
What Does NVE Corp Do?
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NVE Corp develops and sells devices that use spintronics, a nanotechnology that relies on electron spin. It manufactures high-performance spintronic products including sensors and couplers that are used to acquire and transmit data. The company's products include Digital sensors, Medical sensors, Rotation Sensors, GT Sensors, Angle Sensors, Analog sensors, MSOP Isolators, Passive-In Transceivers, and others. The company manufactures high-performance spintronic products including sensors and couplers. The company's designs are based on giant magnetoresistance GMR and tunneling magnetoresistance TMR combined with integrated circuitry.
A Glimpse at NVE Corp's Dividend History
NVE Corp has maintained a consistent dividend payment record since 2015. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down NVE Corp's Dividend Yield and Growth
As of today, NVE Corp currently has a 12-month trailing dividend yield of 5.06% and a 12-month forward dividend yield of 5.06%. This suggests an expectation of same dividend payments over the next 12 months.
Based on NVE Corp's dividend yield and five-year growth rate, the 5-year yield on cost of NVE Corp stock as of today is approximately 5.06%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, NVE Corp's dividend payout ratio is 0.90, which may suggest that the company's dividend may not be sustainable.
NVE Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks NVE Corp's profitability 8 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. NVE Corp's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and NVE Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. NVE Corp's revenue has increased by approximately 14.70% per year on average, a rate that outperforms approximately 56.06% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, NVE Corp's earnings increased by approximately 16.10% per year on average, a rate that outperforms approximately 38.1% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 6.70%, which outperforms approximately 28.35% of global competitors.
Next Steps
In conclusion, while NVE Corp presents a compelling dividend yield, the payout ratio suggests a need for careful consideration of the dividend's sustainability. However, the company's strong profitability and growth metrics provide a level of reassurance. As NVE Corp continues to navigate the dynamic field of nanotechnology, value investors should weigh these factors when considering the stock's potential for long-term income generation. Will NVE Corp's dividends continue to reward investors, or will adjustments be necessary to maintain its financial health? For further analysis and high-dividend yield opportunities, GuruFocus Premium users can utilize the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
