Yahoo Finance Sirius XM Holdings (NASDAQ:SIRI) Is Paying Out A Dividend Of $0.0242
The board of Sirius XM Holdings Inc. (NASDAQ:SIRI) has announced that it will pay a dividend of $0.0242 per share on the 24th of May. This means the dividend yield will be fairly typical at 2.5%.
While the dividend yield is important for income investors, it is also important to consider any large share price moves, as this will generally outweigh any gains from distributions. Sirius XM Holdings' stock price has reduced by 34% in the last 3 months, which is not ideal for investors and can explain a sharp increase in the dividend yield.
View our latest analysis for Sirius XM Holdings
Sirius XM Holdings' Earnings Easily Cover The Distributions
We aren't too impressed by dividend yields unless they can be sustained over time. However, Sirius XM Holdings' 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 13.7%. Assuming the dividend continues along recent trends, we think the payout ratio could be 31% by next year, which is in a pretty sustainable range.
Sirius XM Holdings Is Still Building Its Track Record
Even though the company has been paying a consistent dividend for a while, we would like to see a few more years before we feel comfortable relying on it. The dividend has gone from an annual total of $0.04 in 2017 to the most recent total annual payment of $0.0968. This implies that the company grew its distributions at a yearly rate of about 16% over that duration. It is always nice to see strong dividend growth, but with such a short payment history we wouldn't be inclined to rely on it until a longer track record can be developed.
The Dividend Looks Likely To Grow
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Sirius XM Holdings has impressed us by growing EPS at 18% per year over the past five years. Sirius XM Holdings definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
Sirius XM Holdings Looks Like A Great Dividend Stock
In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. To that end, Sirius XM Holdings has 3 warning signs (and 1 which is significant) we think you should know about. Is Sirius XM Holdings not quite the opportunity you were looking for? Why not check out our selection of top 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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