We Wouldn't Be Too Quick To Buy NXP Semiconductors N.V. (NASDAQ:NXPI) Before It Goes Ex-Dividend

NASDAQ:NXPI) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. If you purchase the stock on or after the 14th of September, you won’t be eligible to receive this dividend, when it is paid on the 5th of October.” data-reactid=”28″>Readers hoping to buy NXP Semiconductors N.V. (NASDAQ:NXPI) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. If you purchase the stock on or after the 14th of September, you won’t be eligible to receive this dividend, when it is paid on the 5th of October.

NXP Semiconductors’s next dividend payment will be US$0.38 per share, and in the last 12 months, the company paid a total of US$1.50 per share. Last year’s total dividend payments show that NXP Semiconductors has a trailing yield of 1.3% on the current share price of $119.72. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether NXP Semiconductors has been able to grow its dividends, or if the dividend might be cut.

View our latest analysis for NXP Semiconductors ” data-reactid=”30″> View our latest analysis for NXP Semiconductors

If a company pays out more in dividends than it earned, then the dividend might become unsustainable – hardly an ideal situation. NXP Semiconductors lost money last year, so the fact that it’s paying a dividend is certainly disconcerting. There might be a good reason for this, but we’d want to look into it further before getting comfortable. Considering the lack of profitability, we also need to check if the company generated enough cash flow to cover the dividend payment. If NXP Semiconductors didn’t generate enough cash to pay the dividend, then it must have either paid from cash in the bank or by borrowing money, neither of which is sustainable in the long term. The good news is it paid out just 21% of its free cash flow in the last year.

here to see the company’s payout ratio, plus analyst estimates of its future dividends.” data-reactid=”36″>Click here to see the company’s payout ratio, plus analyst estimates of its future dividends.

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Have Earnings And Dividends Been Growing?

When earnings decline, dividend companies become much harder to analyse and own safely. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. NXP Semiconductors was unprofitable last year and, unfortunately, the general trend suggests its earnings have been in decline over the last five years, making us wonder if the dividend is sustainable at all.

Another key way to measure a company’s dividend prospects is by measuring its historical rate of dividend growth. In the last two years, NXP Semiconductors has lifted its dividend by approximately 22% a year on average.

get the latest insights on its financial health, here.” data-reactid=”52″>We update our analysis on NXP Semiconductors every 24 hours, so you can always get the latest insights on its financial health, here.

Final Takeaway

Has NXP Semiconductors got what it takes to maintain its dividend payments? First, it’s not great to see the company paying a dividend despite being loss-making over the last year. On the plus side, the dividend was covered by free cash flow.” With the way things are shaping up from a dividend perspective, we’d be inclined to steer clear of NXP Semiconductors.

2 warning signs for NXP Semiconductors (1 is a bit concerning!) that deserve your attention before investing in the shares.” data-reactid=”55″>With that in mind though, if the poor dividend characteristics of NXP Semiconductors don’t faze you, it’s worth being mindful of the risks involved with this business. For example, we’ve found 2 warning signs for NXP Semiconductors (1 is a bit concerning!) that deserve your attention before investing in the shares.

a list of promising dividend stocks with a greater than 2% yield and an upcoming dividend.” data-reactid=”56″>A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising dividend stocks with a greater than 2% yield and an upcoming dividend.