Yahoo Finance Science Applications International (NYSE:SAIC) Will Pay A Dividend Of $0.37
The board of Science Applications International Corporation (NYSE:SAIC) has announced that it will pay a dividend on the 28th of April, with investors receiving $0.37 per share. This means the dividend yield will be fairly typical at 1.4%.
View our latest analysis for Science Applications International
Science Applications International's Payment Has Solid Earnings Coverage
We aren't too impressed by dividend yields unless they can be sustained over time. However, Science Applications International's earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.
The next year is set to see EPS grow by 41.3%. Assuming the dividend continues along recent trends, we think the payout ratio could be 22% by next year, which is in a pretty sustainable range.
Science Applications International Doesn't Have A Long Payment History
It is great to see that Science Applications International has been paying a stable dividend for a number of years now, however we want to be a bit cautious about whether this will remain true through a full economic cycle. Since 2014, the dividend has gone from $1.12 total annually to $1.48. This works out to be a compound annual growth rate (CAGR) of approximately 3.1% a year over that time. Science Applications International hasn't been paying a dividend for very long, so we wouldn't get to excited about its record of growth just yet.
The Dividend Has Growth Potential
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. We are encouraged to see that Science Applications International has grown earnings per share at 6.2% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Science Applications International's prospects of growing its dividend payments in the future.
Our Thoughts On Science Applications International's Dividend
In summary, we are pleased with the dividend remaining consistent, and we think there is a good chance of this continuing in the future. While the payout ratios are a good sign, we are less enthusiastic about the company's dividend record. Taking all of this into consideration, the dividend looks viable moving forward, but investors should be mindful that the company has pushed the boundaries of sustainability in the past and may do so again.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've picked out 1 warning sign for Science Applications International that investors should know about before committing capital to this stock. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.
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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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