Investors interested in the upcoming dividend distribution from Deswell Industries (NASDAQ:DSWL) must own shares by November 30 to be eligible, with the actual payout scheduled for December 21. The company, which is nearing its ex-dividend date, currently offers a trailing yield of 7.4% based on its stock price of $2.71.
Despite a steady earnings per share over the past five years and a moderate payout ratio of 52%, experts urge caution due to the lack of earnings growth, which poses a risk to future dividend sustainability.
Last year's dividend was $0.20 per share, comfortably funded by only a quarter of the company's free cash flow, indicating short-term stability. Nonetheless, investors are advised to thoroughly examine Deswell Industries' financial health and strategic direction before making investment decisions.
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