Dun & Bradstreet Holdings (NYSE:DNB) Has Announced A Dividend Of $0.05

The board of Dun & Bradstreet Holdings, Inc. (NYSE:DNB) has announced that it will pay a dividend on the 19th of September, with investors receiving $0.05 per share. This means that the annual payment will be 1.9% of the current stock price, which is in line with the average for the industry.

Check out our latest analysis for Dun & Bradstreet Holdings

Dun & Bradstreet Holdings Is Paying Out More Than It Is Earning

Unless the payments are sustainable, the dividend yield doesn't mean too much. While Dun & Bradstreet Holdings is not profitable, it is paying out less than 75% of its free cash flow, which means that there is plenty left over for reinvestment into the business. We generally think that cash flow is more important than accounting measures of profit, so we are fairly comfortable with the dividend at this level.

Over the next year, EPS is forecast to grow rapidly. Assuming the dividend continues along recent trends, we could see the payout ratio reach 157%, which is on the unsustainable side.

Dun & Bradstreet Holdings Is Still Building Its Track Record

The dividend has been pretty stable looking back, but the company hasn't been paying one for very long. This makes it tough to judge how it would fare through a full economic cycle. The last annual payment of $0.20 was flat on the annual payment from2 years ago. Dun & Bradstreet Holdings hasn't been paying a dividend for very long, so we wouldn't get to excited about its record of growth just yet.

The Company Could Face Some Challenges Growing The Dividend

The company's investors will be pleased to have been receiving dividend income for some time. We are encouraged to see that Dun & Bradstreet Holdings has grown earnings per share at 98% per year over the past five years. While the company is not yet turning a profit, it is growing at a good rate. If the company can turn a profit relatively soon, we can see this becoming a reliable income stock.

Our Thoughts On Dun & Bradstreet Holdings' Dividend

Overall, it's nice to see a consistent dividend payment, but we think that longer term, the current level of payment might be unsustainable. The payments haven't been particularly stable and we don't see huge growth potential, but with the dividend well covered by cash flows it could prove to be reliable over the short term. We don't think Dun & Bradstreet Holdings is a great stock to add to your portfolio if income is your focus.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. Case in point: We've spotted 2 warning signs for Dun & Bradstreet Holdings (of which 1 makes us a bit uncomfortable!) you should know about. Is Dun & Bradstreet Holdings not quite the opportunity you were looking for? Why not check out our selection of top 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.

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