Nu Skin Enterprises, Inc. (NYSE:NUS) Stock Goes Ex-Dividend In Just 3 Days
Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Nu Skin Enterprises, Inc. (NYSE:NUS) is about to trade ex-dividend in the next 3 days. You will need to purchase shares before the 27th of February to receive the dividend, which will be paid on the 11th of March.
Nu Skin Enterprises's upcoming dividend is US$0.38 a share, following on from the last 12 months, when the company distributed a total of US$1.50 per share to shareholders. Calculating the last year's worth of payments shows that Nu Skin Enterprises has a trailing yield of 5.0% on the current share price of $29.84. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.
View our latest analysis for Nu Skin Enterprises
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. That's why it's good to see Nu Skin Enterprises paying out a modest 47% of its earnings. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. It paid out more than half (73%) of its free cash flow in the past year, which is within an average range for most companies.
It's positive to see that Nu Skin Enterprises's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Stocks with flat earnings can still be attractive dividend payers, but it is important to be more conservative with your approach and demand a greater margin for safety when it comes to dividend sustainability. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. With that in mind, we're not enthused to see that Nu Skin Enterprises's earnings per share have remained effectively flat over the past five years. We'd take that over an earnings decline any day, but in the long run, the best dividend stocks all grow their earnings per share.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the last ten years, Nu Skin Enterprises has lifted its dividend by approximately 13% a year on average.
Final Takeaway
Should investors buy Nu Skin Enterprises for the upcoming dividend? Earnings per share are down very slightly in recent times, and Nu Skin Enterprises paid out less half its profit and more than half its cash flow as dividends, which is not the worst combination but could be better. Overall, it's not a bad combination, but we feel that there are likely more attractive dividend prospects out there.
Curious what other investors think of Nu Skin Enterprises? See what analysts are forecasting, with this visualisation of its historical and future estimated earnings and cash flow.
If you're in the market for dividend stocks, we recommend checking our list of top dividend stocks with a greater than 2% yield and an upcoming dividend.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
