Science Applications International (NYSE:SAIC) Is Paying Out A Dividend Of $0.37

Published
July 12, 2022
NYSE:SAIC
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Science Applications International Corporation (NYSE:SAIC) will pay a dividend of $0.37 on the 29th of July. Based on this payment, the dividend yield on the company's stock will be 1.6%, which is an attractive boost to shareholder returns.

Check out our latest analysis for Science Applications International

Science Applications International'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. However, Science Applications International's earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.

Looking forward, earnings per share is forecast to rise by 42.7% over the next year. Assuming the dividend continues along recent trends, we think the payout ratio could be 22% by next year, which is in a pretty sustainable range.

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NYSE:SAIC Historic Dividend July 12th 2022

Science Applications International Is Still Building Its Track Record

Science Applications International'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. Since 2013, the dividend has gone from $1.12 total annually to $1.48. This works out to be a compound annual growth rate (CAGR) of approximately 3.1% a year over that time. Science Applications International hasn't been paying a dividend for very long, so we wouldn't get to excited about its record of growth just yet.

Science Applications International Could Grow Its Dividend

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. It's encouraging to see that Science Applications International has been growing its earnings per share at 6.1% a year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.

In Summary

In summary, we are pleased with the dividend remaining consistent, and we think there is a good chance of this continuing in the future. The payout ratio looks good, but unfortunately the company's dividend track record isn't stellar. This looks like it could be a good dividend stock going forward, but we would note that the payout ratio has been at higher levels in the past so it could happen again.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. 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 1 warning sign for Science Applications International that investors should take into consideration. 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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