The board of directors of Amkor Technology, Inc. (NASDAQ:AMKR) announced a dividend of $0.0788 per share to be paid on September 23rd, which means the dividend yield is a fairly standard 1.0%.
Read our latest analysis for Amkor Technology
Amkor Technology's dividend is well covered by profits.
A stable dividend yield is nice, but isn't really useful if the payments aren't sustainable, but Amkor Technology's earnings more than cover its dividend, meaning the majority of the company's earnings are funding growth.
Over the next year, EPS is forecast to grow by 103.2%. Assuming the dividend continues along recent trends, the dividend payout ratio could be 14% by next year, which is a fairly sustainable range.
NasdaqGS:AMKR August 17, 2024 Highest dividend ever
Amkor Technology continues to build on its track record
The company has maintained a stable dividend over the past few years, but we want to see a longer track record before relying on it. The annualized payment over the past four years was $0.16 in 2020, and $0.315 in the most recent fiscal year. This means that the company has grown its dividend at a rate of about 18% per year over that period. The dividend has been growing rapidly, but with a short payment history, it is unclear whether the payments will continue to grow over the long term, so we recommend caution.
Dividends are likely to increase
Investors in the company will likely be happy to receive this dividend income for some time to come. Amkor Technology has grown its earnings per share at 47% per year over the past five years, which is encouraging. Earnings per share have been growing at a steady pace, and the dividend payout ratio is low. This seems like an ideal combination for a dividend stock, as the company can increase its dividend fairly easily in the future.
We really like Amkor Technology's dividend
Overall, we want to see stable dividends, and we think Amkor Technology may even be able to increase its dividend in the future. The dividend should be easily covered by earnings, and earnings also translate into cash flow. Taking all these factors into account, we think this stock has solid potential as a dividend stock.
Companies with a stable dividend policy are more likely to attract investor interest than those that suffer from an inconsistent approach. Meanwhile, despite the importance of dividends, they aren't the only factor our readers should know when evaluating a company. Earnings growth generally bodes well for the future value of a company's dividends. See if the 8 Amkor Technology analysts we track are predicting continued growth with our free report on analyst forecasts for the company. If you're a dividend investor, you might also want to check out our curated list of high dividend stocks.
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This article by Simply Wall St is of general nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology, and our articles are not intended as financial advice. It is not a recommendation to buy or sell a stock, and does not take into account your objectives or financial situation. We aim to provide long-term analysis driven by fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned herein.
