Findev (CVE:FDI) Will Pay A Dividend Of CA$0.0075

September 29, 2021
  •  Updated
January 01, 2022
TSXV:FDI
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Findev Inc. (CVE:FDI) will pay a dividend of CA$0.0075 on the 14th of January. This makes the dividend yield 6.1%, which will augment investor returns quite nicely.

See our latest analysis for Findev

Findev's Dividend Is Well Covered By Earnings

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. Based on the last payment, Findev was paying only paying out a fraction of earnings, but the payment was a massive 137% of cash flows. The business might be trying to strike a balance between returning cash to shareholders and reinvesting back into the business, but this high of a payout ratio could definitely force the dividend to be cut if the company runs into a bit of a tough spot.

If the trend of the last few years continues, EPS will grow by 17.7% over the next 12 months. Assuming the dividend continues along recent trends, we think the payout ratio could be 36% by next year, which is in a pretty sustainable range.

historic-dividend
TSXV:FDI Historic Dividend September 30th 2021

Findev Is Still Building Its Track Record

Findev's dividend has been pretty stable for a little while now, but we will continue to be cautious until it has been demonstrated for a few more years. The most recent annual payment of CA$0.03 is about the same as the first annual payment 5 years ago. We like that the dividend hasn't been shrinking. However we're conscious that the company hasn't got an overly long track record of dividend payments yet, which makes us wary of relying on its dividend income.

The Dividend Looks Likely To Grow

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 Findev has grown earnings per share at 18% per year over the past three years. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

Our Thoughts On Findev's Dividend

Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. While Findev is earning enough to cover the payments, the cash flows are lacking. This company is not in the top tier of income providing stocks.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. As an example, we've identified 3 warning signs for Findev that you should be aware of before investing. Looking for more high-yielding dividend ideas? Try our curated list of strong dividend payers.

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