Match Group (NASDAQ:MTCH) Will Pay A Dividend Of $0.19
The board of Match Group, Inc. (NASDAQ:MTCH) has announced that it will pay a dividend of $0.19 per share on the 21st of January. Based on this payment, the dividend yield on the company's stock will be 2.2%, which is an attractive boost to shareholder returns.
Match Group's Future Dividend Projections Appear Well Covered By Earnings
While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. However, prior to this announcement, Match Group's dividend was comfortably covered by both cash flow and earnings. This means that most of what the business earns is being used to help it grow.
The next year is set to see EPS grow by 64.7%. Assuming the dividend continues along recent trends, we think the payout ratio could be 19% by next year, which is in a pretty sustainable range.
View our latest analysis for Match Group
Match Group Is Still Building Its Track Record
It is tough to make a judgement on how stable a dividend is when the company hasn't been paying one for very long. This doesn't mean that the company can't pay a good dividend, but just that we want to wait until it can prove itself.
The Dividend's Growth Prospects Are Limited
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Match Group hasn't seen much change in its earnings per share over the last five years. While growth may be thin on the ground, Match Group could always pay out a higher proportion of earnings to increase shareholder returns.
In Summary
Overall, we think Match Group is a solid choice as a dividend stock, even though the dividend wasn't raised this year. The payout ratio looks good, but unfortunately the company's dividend track record isn't stellar. The dividend looks okay, but there have been some issues in the past, so we would be a little bit cautious.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For instance, we've picked out 2 warning signs for Match Group that investors should take into consideration. Is Match Group not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
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