Fonix Mobile (LON:FNX) Will Pay A Dividend Of £0.026

Fonix Mobile plc's ( LON:FNX ) investors are due to receive a payment of £0.026 per share on 2nd of April. Although the dividend is now higher, the yield is only 2.7%, which is below the industry average.

View our latest analysis for Fonix Mobile

Fonix Mobile's Dividend Is Well Covered By Earnings

The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock. Prior to this announcement, Fonix Mobile's dividend made up quite a large proportion of earnings but only 43% of free cash flows. This leaves plenty of cash for reinvestment into the business.

Looking forward, earnings per share is forecast to rise by 3.4% over the next year. Assuming the dividend continues along the course it has been charting recently, our estimates show the payout ratio being 37% which brings it into quite a comfortable range.

Fonix Mobile Payment History

The dividend hasn't seen any major cuts in the past, and the company been paying a dividend the whole time it has been listed. Since 2021, the dividend has gone from £0.034 total annually to £0.0749. This implies that the company grew its distributions at a yearly rate of about 30% over that duration. The dividend is growing at a nice rate and we might take a closer look.

Our Thoughts On Fonix Mobile's Dividend

Overall, we always like to see the dividend being raised. In the past, the payments have been unstable, but over the short term the dividend could be reliable, with the company generating enough cash to cover it. 

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. Taking the debate a bit further, we've identified 1 warning sign for Fonix Mobile that investors need to be conscious of moving forward. If you are a dividend investor, you might also want to look at our curated list of high yield 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.