Science Applications International's (NYSE:SAIC) Dividend Will Be $0.37

Science Applications International Corporation's (NYSE:SAIC) investors are due to receive a payment of $0.37 per share on 28th of July. The dividend yield is 1.4% based on this payment, which is a little bit low compared to the other companies in the industry.

View our latest analysis for Science Applications International

Science Applications International's Dividend Is Well Covered By Earnings

If it is predictable over a long period, even low dividend yields can be attractive. However, Science Applications International's earnings easily cover the dividend. This means that most of its earnings are being retained to grow the business.

Looking forward, earnings per share is forecast to rise by 9.6% over the next year. If the dividend continues on this path, the payout ratio could be 24% by next year, which we think can be pretty sustainable going forward.

Science Applications International Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. The dividend has gone from an annual total of $1.12 in 2013 to the most recent total annual payment of $1.48. This implies that the company grew its distributions at a yearly rate of about 2.8% over that duration. Slow and steady dividend growth might not sound that exciting, but dividends have been stable for ten years, which we think makes this a fairly attractive offer.

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. Science Applications International has impressed us by growing EPS at 7.8% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Science Applications International's prospects of growing its dividend payments in the future.

Science Applications International Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think Science Applications International might even raise payments in the future. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've identified 3 warning signs for Science Applications International (1 is concerning!) that you should be aware of before investing. Is Science Applications International not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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