Yahoo Finance DENTSPLY SIRONA Inc. (NASDAQ:XRAY) Will Pay A US$0.14 Dividend In Four Days
Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see DENTSPLY SIRONA Inc. (NASDAQ:XRAY) is about to trade ex-dividend in the next four days. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. In other words, investors can purchase DENTSPLY SIRONA's shares before the 30th of March in order to be eligible for the dividend, which will be paid on the 14th of April.
The company's next dividend payment will be US$0.14 per share. Last year, in total, the company distributed US$0.50 to shareholders. Based on the last year's worth of payments, DENTSPLY SIRONA has a trailing yield of 1.5% on the current stock price of $37.25. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. We need to see whether the dividend is covered by earnings and if it's growing.
View our latest analysis for DENTSPLY SIRONA
Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. DENTSPLY SIRONA's dividend is not well covered by earnings, as the company lost money last year. This is not a sustainable state of affairs, so it would be worth investigating if earnings are expected to recover. Given that the company reported a loss last year, we now need to see if it generated enough free cash flow to fund the dividend. If DENTSPLY SIRONA didn't generate enough cash to pay the dividend, then it must have either paid from cash in the bank or by borrowing money, neither of which is sustainable in the long term. It distributed 28% of its free cash flow as dividends, a comfortable payout level for most companies.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. DENTSPLY SIRONA was unprofitable last year, but at least the general trend suggests its earnings have been improving over the past five years. Even so, an unprofitable company whose business does not quickly recover is usually not a good candidate for dividend investors.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Since the start of our data, 10 years ago, DENTSPLY SIRONA has lifted its dividend by approximately 9.8% a year on average. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.
Remember, you can always get a snapshot of DENTSPLY SIRONA's financial health, by checking our visualisation of its financial health, here.
To Sum It Up
Is DENTSPLY SIRONA worth buying for its dividend? It's hard to get used to DENTSPLY SIRONA paying a dividend despite reporting a loss over the past year. At least the dividend was covered by free cash flow, however. While it does have some good things going for it, we're a bit ambivalent and it would take more to convince us of DENTSPLY SIRONA's dividend merits.
On that note, you'll want to research what risks DENTSPLY SIRONA is facing. For example, we've found 1 warning sign for DENTSPLY SIRONA that we recommend you consider before investing in the business.
Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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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