Read This Before Buying NIC Inc (NASDAQ:EGOV) For Its Upcoming $0.08 Dividend
Important news for shareholders and potential investors in NIC Inc (NASDAQ:EGOV): The dividend payment of $0.08 per share will be distributed into shareholder on 20 March 2018, and the stock will begin trading ex-dividend at an earlier date, 05 March 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into NIC’s latest financial data to analyse its dividend attributes. View our latest analysis for NIC
5 checks you should do on a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
Is it paying an annual yield above 75% of dividend payers?
Does it consistently pay out dividends without missing a payment of significantly cutting payout?
Has dividend per share risen in the past couple of years?
Does earnings amply cover its dividend payments?
Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
Does NIC pass our checks?
The company currently pays out 41.43% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently 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 is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Although EGOV’s per share payments have increased in the past 10 years, it has not been a completely smooth ride. Shareholders would have seen a few years of reduced payments in this time. In terms of its peers, NIC produces a yield of 2.35%, which is high for Internet stocks but still below the market’s top dividend payers.
Next Steps:
If you are building an income portfolio, then NIC is a complicated choice since it has some positive aspects as well as negative ones. 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, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. There are three relevant aspects you should further examine:
Future Outlook: What are well-informed industry analysts predicting for EGOV’s future growth? Take a look at our free research report of analyst consensus for EGOV’s outlook.
Valuation: What is EGOV 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 EGOV is currently mispriced by the market.
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.
