Yahoo Finance InterDigital Inc's Dividend Analysis
Assessing the Sustainability and Growth of InterDigital Inc's Dividends
InterDigital Inc(NASDAQ:IDCC) recently announced a dividend of $0.4 per share, payable on 2024-04-24, with the ex-dividend date set for 2024-04-09. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into InterDigital Inc's dividend performance and assess its sustainability.
What Does InterDigital Inc Do?
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InterDigital Inc is a research and development company focused on wireless, video, Artificial Intelligence and related technologies. It designs and develops technologies that enable connected, immersive experiences in a broad range of communications and entertainment products and services. The majority of revenue is generated from fixed-fee patent license agreements, with a smaller portion coming from variable royalty agreements. Geographically it operates in the United States, China, South Korea, Japan, Taiwan, and Europe, with the majority of its revenue coming from China.
A Glimpse at InterDigital Inc's Dividend History
InterDigital Inc has maintained a consistent dividend payment record since 2011. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down InterDigital Inc's Dividend Yield and Growth
As of today, InterDigital Inc currently has a 12-month trailing dividend yield of 1.56% and a 12-month forward dividend yield of 1.67%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, InterDigital Inc's annual dividend growth rate was 11.40%. Extended to a five-year horizon, this rate decreased to -0.60% per year. And over the past decade, InterDigital Inc's annual dividends per share growth rate stands at an impressive 12.40%.
Based on InterDigital Inc's dividend yield and five-year growth rate, the 5-year yield on cost of InterDigital Inc stock as of today is approximately 1.51%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, InterDigital Inc's dividend payout ratio is 0.19.
InterDigital Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks InterDigital Inc's profitability 10 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. InterDigital Inc's growth rank of 10 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and InterDigital Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. InterDigital Inc's revenue has increased by approximately 19.20% per year on average, a rate that outperforms approximately 72.7% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, InterDigital Inc's earnings increased by approximately 74.30% per year on average, a rate that outperforms approximately 94.59% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 54.90%, which outperforms approximately 95.07% of global competitors.
Next Steps
In conclusion, InterDigital Inc's upcoming dividend payment, consistent dividend history, and positive growth metrics position it as an attractive option for value investors seeking sustainable income. The company's strong payout ratio and profitability rank, combined with its impressive growth rates, suggest that InterDigital Inc is well-equipped to continue rewarding shareholders with dividends. As investors consider the future prospects of InterDigital Inc, they should also weigh these financial health indicators to make informed decisions. For those looking to explore similar investment opportunities, GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
