DENTSPLY SIRONA (NASDAQ:XRAY) Has Affirmed Its Dividend Of $0.16

DENTSPLY SIRONA Inc. (NASDAQ:XRAY) will pay a dividend of $0.16 on the 11th of April. This makes the dividend yield 4.1%, which will augment investor returns quite nicely.

Check out our latest analysis for DENTSPLY SIRONA

Estimates Indicate DENTSPLY SIRONA's Dividend Coverage Likely To Improve

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. Even though DENTSPLY SIRONA isn't generating a profit, it is generating healthy free cash flows that easily cover the dividend. In general, cash flows are more important than the more traditional measures of profit so we feel pretty comfortable with the dividend at this level.

According to analysts, EPS should be several times higher next year. Assuming the dividend continues along recent trends, we think the payout ratio will be 3.0%, which makes us pretty comfortable with the sustainability of the dividend.

DENTSPLY SIRONA Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. The dividend has gone from an annual total of $0.265 in 2015 to the most recent total annual payment of $0.64. This means that it has been growing its distributions at 9.2% per annum over that time. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.

Dividend Growth Potential Is Shaky

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Let's not jump to conclusions as things might not be as good as they appear on the surface. DENTSPLY SIRONA's EPS has fallen by approximately 44% per year during the past five years. Dividend payments are likely to come under some pressure unless EPS can pull out of the nosedive it is in. On the bright side, earnings are predicted to gain some ground over the next year, but until this turns into a pattern we wouldn't be feeling too comfortable.

In Summary

In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about DENTSPLY SIRONA's payments, as there could be some issues with sustaining them into the future. The company has been bring in plenty of cash to cover the dividend, but we don't necessarily think that makes it a great dividend stock. This company is not in the top tier of income providing stocks.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. For example, we've picked out 1 warning sign for DENTSPLY SIRONA that investors should know about before committing capital to this stock. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.