Findev's (CVE:FDI) Dividend Will Be CA$0.0075

July 28, 2021
  •  Updated
October 03, 2022
TSXV:FDI
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The board of Findev Inc. (CVE:FDI) has announced that it will pay a dividend of CA$0.0075 per share on the 15th of October. This makes the dividend yield 5.7%, which will augment investor returns quite nicely.

See our latest analysis for Findev

Findev's Payment Has Solid Earnings Coverage

A big dividend yield for a few years doesn't mean much if it can't be sustained. Based on the last dividend, Findev is earning enough to cover the payment, but the it makes up 130% of cash flows. This signals that the company is more focused on returning cash flow to shareholders, but it could mean that the dividend is exposed to cuts in the future.

Over the next year, EPS could expand by 94.9% if recent trends continue. If the dividend continues along recent trends, we estimate the payout ratio will be 23%, which is in the range that makes us comfortable with the sustainability of the dividend.

historic-dividend
TSXV:FDI Historic Dividend July 29th 2021

Findev Doesn't Have A Long Payment History

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 payments haven't really changed that much since 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. Findev has seen EPS rising for the last five years, at 95% per annum. Findev is clearly able to grow rapidly while still returning cash to shareholders, positioning it to become a strong dividend payer in the future.

In Summary

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. We would be a touch cautious of relying on this stock primarily for the dividend income.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For instance, we've picked out 3 warning signs for Findev that investors should take into consideration. If you are a dividend investor, you might also want to look at our curated list of high performing dividend stock.

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