Iridium Communications' (NASDAQ:IRDM) Dividend Will Be $0.14

Iridium Communications Inc. (NASDAQ:IRDM) has announced that it will pay a dividend of $0.14 per share on the 30th of June. This means the annual payment will be 2.2% of the current stock price, which is lower than the industry average.

Our free stock report includes 1 warning sign investors should be aware of before investing in Iridium Communications. Read for free now.

Iridium Communications' Projected Earnings Seem Likely To Cover Future Distributions

While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible. Prior to this announcement, Iridium Communications' dividend was comfortably covered by both cash flow and earnings. This indicates that a lot of the earnings are being reinvested into the business, with the aim of fueling growth.

The next year is set to see EPS grow by 78.5%. If the dividend continues on this path, the payout ratio could be 27% by next year, which we think can be pretty sustainable going forward.

Check out our latest analysis for Iridium Communications

Iridium Communications Is Still Building Its Track Record

The company has maintained a consistent dividend for a few years now, but we would like to see a longer track record before relying on it. The dividend has gone from an annual total of $0.52 in 2023 to the most recent total annual payment of $0.56. This works out to be a compound annual growth rate (CAGR) of approximately 3.8% a year over that time. It's good to see at least some dividend growth. Yet with a relatively short dividend paying history, we wouldn't want to depend on this dividend too heavily.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. It's encouraging to see that Iridium Communications has been growing its earnings per share at 85% a year over the past five years. The company doesn't have any problems growing, despite returning a lot of capital to shareholders, which is a very nice combination for a dividend stock to have.

Iridium Communications Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think Iridium Communications might even raise payments in the future. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All of these factors considered, we think this has solid potential as a dividend stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. For example, we've picked out 1 warning sign for Iridium Communications that investors should know about before committing capital to this stock. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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