In This Article:
Fidelity National Information Services, Inc. (NYSE:FIS) stock is about to trade ex-dividend in four days. If you purchase the stock on or after the 11th of December, you won't be eligible to receive this dividend, when it is paid on the 28th of December.
Fidelity National Information Services's next dividend payment will be US$0.35 per share, on the back of last year when the company paid a total of US$1.40 to shareholders. Based on the last year's worth of payments, Fidelity National Information Services stock has a trailing yield of around 0.9% on the current share price of $149.86. If you buy this business for its dividend, you should have an idea of whether Fidelity National Information Services's dividend is reliable and sustainable. We need to see whether the dividend is covered by earnings and if it's growing.
View our latest analysis for Fidelity National Information Services
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. Fidelity National Information Services reported a loss last year, so it's not great to see that it has continued paying a dividend. Considering the lack of profitability, we also need to check if the company generated enough cash flow to cover the dividend payment. If Fidelity National Information Services 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. It distributed 34% of its free cash flow as dividends, a comfortable payout level for most companies.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Companies with falling earnings are riskier for dividend shareholders. If earnings fall far enough, the company could be forced to cut its dividend. Fidelity National Information Services 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.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the past 10 years, Fidelity National Information Services has increased its dividend at approximately 21% a year on average.
We update our analysis on Fidelity National Information Services every 24 hours, so you can always get the latest insights on its financial health, here.