Dana Incorporated's shareholders are set to receive a dividend payout of $0.10 per share on December 1st, translating to a dividend yield of 3.2%. This comes in the wake of a significant 34% decline in the company's stock price over the past quarter, which could potentially offset the benefits of the dividend earnings.
Despite not currently generating profits, Dana has been allocating a significant portion of its cash inflow towards dividends. This action has led to questions surrounding the company's long-term viability. If current trends continue, there is an expectation of a notable increase in earnings per share and a potential 26% rise in dividends.
The company's dividend history, however, is marked with cuts. Despite this, Dana exhibited resilience with a 7.2% annual dividend growth from $0.20 in 2013 to $0.40 recently. Yet, a substantial 55% decline in earnings over the last five years and previous dividend cuts may cast some uncertainty over future growth for dividends.
InvestingPro Insights
According to real-time data from InvestingPro, Dana Incorporated (DAN) has a market capitalization of $1.82 billion and a 3.17% dividend yield as of Q3 2023. Despite a negative P/E ratio of -17.66, which indicates a lack of profitability, the company's revenue has grown by 7.51% over the last twelve months as of Q3 2023, reaching $10.62 billion.
InvestingPro Tips highlight that strong earnings should allow management to continue dividend payments. Moreover, net income is expected to grow this year, potentially boosting the company's financial health. Yet, the company has been experiencing a declining trend in earnings per share and weak gross profit margins, which are potential red flags for investors.
It's worth noting that Dana has maintained dividend payments for 12 consecutive years, and its liquid assets exceed short term obligations, which could be a sign of the company's resilience amidst challenges. For more insights, check out InvestingPro which offers a total of 14 additional tips for Dana Incorporated.
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