Via Renewables' (NASDAQ:VIA) Dividend Will Be $0.1813

Via Renewables, Inc. (NASDAQ:VIA) has announced that it will pay a dividend of $0.1813 per share on the 15th of December. This means the annual payment is 9.9% of the current stock price, which is above the average for the industry.

Check out our latest analysis for Via Renewables

Via Renewables' Distributions May Be Difficult To Sustain

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. The company is paying out a large amount of its cash flows, even though it isn't generating any profit. This makes us feel that the dividend will be hard to maintain.

Looking forward, earnings per share could rise by 7.0% over the next year if the trend from the last few years continues. The company seems to be going down the right path, but it will probably take a little bit longer than a year to cross over into profitability. Unless this can be done in short order, the dividend might be difficult to sustain.

Via Renewables Doesn't Have A Long Payment History

Via Renewables' 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. The annual payment during the last 8 years was $0.481 in 2014, and the most recent fiscal year payment was $0.725. This works out to be a compound annual growth rate (CAGR) of approximately 5.3% a year over that time. Via Renewables has a nice track record of dividend growth but we would wait until we see a longer track record before getting too confident.

We Could See Via Renewables' Dividend Growing

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Via Renewables has seen EPS rising for the last five years, at 7.0% per annum. It's not an ideal situation that the company isn't turning a profit but the growth recently is a positive sign. As long as the company becomes profitable soon, it is on a trajectory that could see it being a solid dividend payer.

The Dividend Could Prove To Be Unreliable

Overall, it's nice to see a consistent dividend payment, but we think that longer term, the current level of payment might be unsustainable. The payments are bit high to be considered sustainable, and the track record isn't the best. This company is not in the top tier of income providing stocks.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Taking the debate a bit further, we've identified 2 warning signs for Via Renewables that investors need to be conscious of moving forward. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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