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Fonix Mobile (LON:FNX) Will Pay A Dividend Of £0.026

The board of Fonix Mobile plc ( LON:FNX ) has announced that it will pay a dividend on the 2nd of April, with investors receiving £0.026 per share. This takes the annual payment to 2.8% of the current stock price, which unfortunately is below what the industry is paying.

See our latest analysis for Fonix Mobile

Fonix Mobile's Earnings Easily Cover The Distributions

While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible. Before this announcement, Fonix Mobile was paying out 78% of earnings, but a comparatively small 43% of free cash flows. This leaves plenty of cash for reinvestment into the business.

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Looking forward, earnings per share is forecast to rise by 3.4% over the next year. Assuming the dividend continues along the course it has been charting recently, our estimates show the payout ratio being 37% which brings it into quite a comfortable range.

historic-dividend
AIM:FNX Historic Dividend March 17th 2024

Fonix Mobile Payment History

The dividend hasn't seen any major cuts in the past, and the company been paying a dividend the whole time it has been listed. Since 2021, the dividend has gone from £0.034 total annually to £0.0749. This implies that the company grew its distributions at a yearly rate of about 30% over that duration. The dividend is growing at a nice rate and we might take a closer look.

Our Thoughts On Fonix Mobile's Dividend

Overall, we always like to see the dividend being raised. In the past, the payments have been unstable, but over the short term the dividend could be reliable, with the company generating enough cash to cover it.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. Taking the debate a bit further, we've identified 1 warning sign for Fonix Mobile that investors need to be conscious of moving forward. Looking for more high-yielding dividend ideas? Try our collection of 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.