Stock Analysis
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Nu Skin Enterprises (NYSE:NUS) Will Pay A Dividend Of US$0.38
Nu Skin Enterprises, Inc.'s (NYSE:NUS) investors are due to receive a payment of US$0.38 per share on 8th of September. This means the annual payment is 2.7% of the current stock price, which is above the average for the industry.
See our latest analysis for Nu Skin Enterprises
Nu Skin Enterprises' Dividend Is Well Covered By Earnings
While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. However, Nu Skin Enterprises' 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 fall by 3.1% over the next year. Assuming the dividend continues along recent trends, we believe the payout ratio could be 34%, which we are pretty comfortable with and we think is feasible on an earnings basis.
Nu Skin Enterprises Has A Solid Track Record
The company has a sustained record of paying dividends with very little fluctuation. The dividend has gone from US$0.50 in 2011 to the most recent annual payment of US$1.52. This works out to be a compound annual growth rate (CAGR) of approximately 12% a year over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.
The Dividend Looks Likely To Grow
The company's investors will be pleased to have been receiving dividend income for some time. Nu Skin Enterprises has impressed us by growing EPS at 21% per year over the past five years. Rapid earnings growth and a low payout ratio suggest this company has been effectively reinvesting in its business. Should that continue, this company could have a bright future.
Nu Skin Enterprises Looks Like A Great Dividend Stock
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 earnings easily cover the company's distributions, and the company is generating plenty of cash. We should point out that the earnings are expected to fall over the next 12 months, which won't be a problem if this doesn't become a trend, but could cause some turbulence in the next year. All of these factors considered, we think this has solid potential as a dividend stock.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. For example, we've picked out 2 warning signs for Nu Skin Enterprises that investors should know about before committing capital to this stock. We have also put together a list of global stocks with a solid dividend.
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What are the risks and opportunities for Nu Skin Enterprises?
Nu Skin Enterprises, Inc., together with its subsidiaries, develops and distributes various beauty and wellness products worldwide.
Rewards
Trading at 26% below our estimate of its fair value
Earnings are forecast to grow 26.79% per year
Risks
Significant insider selling over the past 3 months
Large one-off items impacting financial results
Further research on
Nu Skin Enterprises
This article by Simply Wall St is general in nature. 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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About NYSE:NUS
Nu Skin Enterprises
Nu Skin Enterprises, Inc., together with its subsidiaries, develops and distributes various beauty and wellness products worldwide.
Undervalued with excellent balance sheet and pays a dividend.
