Motorola Solutions, Inc. (NYSE:MSI) stock is set to trade ex-dividend in four days. The ex-dividend date is crucial as it determines eligibility for receiving dividends. Investors who purchase the stock on or after June 14th will not receive the dividend, which will be paid on July 15th.
The company’s upcoming dividend payment will be US$0.98 per share, following last year’s total payout of US$3.92 to shareholders. With a current share price of US$371.06, Motorola Solutions stock has a trailing yield of around 1.1%. It’s essential to assess whether the company can sustain and potentially grow its dividend.
Dividends are typically paid from company earnings, and Motorola Solutions has a modest payout ratio of 45%. Additionally, the dividend payments accounted for only 28% of the free cash flow generated, indicating a comfortable payout ratio. This suggests that the dividend is covered by both profits and cash flow, signifying sustainability.
Earnings per share growth is vital for dividend stocks, and Motorola Solutions has seen a 7.0% increase per annum over the last five years. The company’s dividend has also shown a 12% growth per year on average over the past decade, aligning with earnings growth.
In conclusion, Motorola Solutions appears well-positioned to maintain its dividend payments. With earnings growth, conservative dividend payouts, and room for potential dividend increases, the company could perform reasonably over the long run. However, it’s essential to consider the risks involved before investing in the stock.