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It looks like Network-1 Technologies, Inc. (NYSEMKT:NTIP) is about to go ex-dividend in the next 4 days. You will need to purchase shares before the 3rd of September to receive the dividend, which will be paid on the 20th of September.
Network-1 Technologies's next dividend payment will be US$0.05 per share, on the back of last year when the company paid a total of US$0.10 to shareholders. Based on the last year's worth of payments, Network-1 Technologies stock has a trailing yield of around 4.2% on the current share price of $2.4. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether Network-1 Technologies has been able to grow its dividends, or if the dividend might be cut.
Check out our latest analysis for Network-1 Technologies
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Network-1 Technologies reported a loss after tax last year, which means it's paying a dividend despite being unprofitable. While this might be a one-off event, this is unlikely to be sustainable in the long term. Given that the company reported a loss last year, we now need to see if it generated enough free cash flow to fund the dividend. If Network-1 Technologies didn't generate enough cash to pay the dividend, then it must have either paid from cash in the bank or by borrowing money, neither of which is sustainable in the long term.
Click here to see how much of its profit Network-1 Technologies paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Network-1 Technologies reported a loss last year, but at least the general trend suggests its income has been improving over the past five years. Even so, an unprofitable company whose business does not quickly recover is usually not a good candidate for dividend investors.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Network-1 Technologies's dividend payments are effectively flat on where they were three years ago.
We update our analysis on Network-1 Technologies every 24 hours, so you can always get the latest insights on its financial health, here.