Ingram Micro Holding Corporation (NYSE:INGM) Pays A US$0.088 Dividend In Just Four Days
Readers hoping to buy Ingram Micro Holding Corporation (NYSE:INGM) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. The ex-dividend date is important as the process of settlement involves a full business day. So if you miss that date, you would not show up on the company's books on the record date. Therefore, if you purchase Ingram Micro Holding's shares on or after the 9th of November, you won't be eligible to receive the dividend, when it is paid on the 23rd of November.
The company's next dividend payment will be US$0.088 per share, on the back of last year when the company paid a total of US$0.35 to shareholders. Last year's total dividend payments show that Ingram Micro Holding has a trailing yield of 1.3% on the current share price of US$26.51. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. We need to see whether the dividend is covered by earnings and if it's growing.
Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Ingram Micro Holding has a low and conservative payout ratio of just 17% of its income after tax. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. Over the last year it paid out 52% of its free cash flow as dividends, within the usual range for most companies.
It's positive to see that Ingram Micro Holding's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.
Check out our latest analysis for Ingram Micro Holding
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
When earnings decline, dividend companies become much harder to analyse and own safely. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Ingram Micro Holding's earnings have collapsed faster than Wile E Coyote's schemes to trap the Road Runner; down a tremendous 43% a year over the past five years.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the last two years, Ingram Micro Holding has lifted its dividend by approximately 9.0% a year on average.
Final Takeaway
Has Ingram Micro Holding got what it takes to maintain its dividend payments? Its earnings per share have been declining meaningfully, although it is paying out less than half its income and more than half its cash flow as dividends. Neither payout ratio appears an immediate concern, but we're concerned about the earnings. Overall, it's hard to get excited about Ingram Micro Holding from a dividend perspective.
If you want to look further into Ingram Micro Holding, it's worth knowing the risks this business faces. For example - Ingram Micro Holding has 1 warning sign we think you should be aware of.
If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.
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