Dolby Laboratories (NYSE: DLB) to pay dividend of US $ 0.22

The advice of Dolby Laboratories, Inc. (NYSE: DLB) has announced that it will pay a dividend of US $ 0.22 per share on August 19. Based on this payment, the dividend yield will be 0.9%, which is quite typical for the industry.

Check Out Our Latest Analysis For Dolby Laboratories

Dolby Laboratories revenues easily cover distributions

We like a dividend to be consistent over the long term, so it’s important to check if it’s sustainable. However, Dolby Laboratories’ profits easily cover the dividend. This means that most of what the business earns is used to help it grow.

Next year, EPS is expected to rise 3.8%. If the dividend continues on that path, the payout ratio could be 34% by next year, which we believe may be quite sustainable going forward.

NYSE: DLB Historical Dividend August 3, 2021

Dolby Laboratories does not have a long payment history

It’s good to see that Dolby Laboratories has been paying a stable dividend for several years now, but we want to be a little cautious about whether that will hold true throughout a full business cycle. The dividend went from US $ 0.40 in 2014 to the last annual payment of US $ 0.88. This means that he increased his distributions by 12% per year during this period. Dolby Laboratories increased their dividend quite quickly, which is exciting. However, the short history of payments makes us wonder if this performance will persist throughout a full market cycle.

Dolby Laboratories could increase its dividend

Some investors will be eager to buy a portion of the company’s stock based on its dividend history. It is encouraging to see that Dolby Laboratories has increased its earnings per share by 7.0% per year over the past five years. With decent growth and a low payout ratio, we think this bodes well for Dolby Laboratories’ prospects of increasing its dividend payouts going forward.

In summary

Overall, we think Dolby Laboratories is a solid choice as a dividend stock, although the dividend has not been increased this year. While payout ratios are a good sign, we’re less excited about the company’s dividend record. The payout isn’t exceptional, but it could be a decent addition to a dividend portfolio.

It is important to note that companies with a consistent dividend policy will generate greater investor confidence than those with an erratic policy. At the same time, there are other factors that our readers should be aware of before investing any capital in a stock. Companies with rising profits tend to be the best long-term dividend-paying stocks. See what the 4 analysts we follow are forecasting for Dolby Laboratories free with estimates from public analysts for the company. Looking for more high yield dividend ideas? Try our organized list of big dividend payers.

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