Nu Skin Enterprises (NYSE:NUS) Will Pay A Dividend Of US$0.38

Nu Skin Enterprises, Inc. (NYSE:NUS) will pay a dividend of US$0.38 on the 9th of June. This means the annual payment is 2.5% of the current stock price, which is above the average for the industry.

View our latest analysis for Nu Skin Enterprises

Nu Skin Enterprises' Payment Has Solid Earnings Coverage

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. However, prior to this announcement, Nu Skin Enterprises' dividend was comfortably covered by both cash flow and earnings. As a result, a large proportion of what it earned was being reinvested back into the business.

Looking forward, earnings per share is forecast to rise by 0.5% over the next year. Assuming the dividend continues along recent trends, we think the payout ratio could be 36% by next year, which is in a pretty sustainable range.

Nu Skin Enterprises Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2011, the dividend has gone from US$0.50 to US$1.52. This means that it has been growing its distributions at 12% per annum over that time. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. We are encouraged to see that Nu Skin Enterprises has grown earnings per share at 20% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Nu Skin Enterprises' prospects of growing its dividend payments in the future.

We Really Like Nu Skin Enterprises' Dividend

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. 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 2 warning signs for Nu Skin Enterprises (1 is a bit concerning!) that you should be aware of before investing. We have also put together a list of global stocks with a solid dividend.

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