Nu Skin Enterprises, a global direct selling company, is drawing attention from investors with its upcoming dividend payment. Shareholders who purchase shares before the ex-dividend date of November 22nd will be eligible for a dividend of $0.39 per share, which reflects an 8.8% yield based on the current share price of $17.75.
The record date set for November 22nd will determine the shareholders entitled to receive the dividend. Nu Skin is scheduled to distribute the dividend on December 6th, continuing its practice from last year when it paid out a total of $1.56 per share.
Despite this attractive yield, there are concerns about the sustainability of Nu Skin's dividends. The company's payout ratio is notably high, at 132% of profits and 203% of free cash flow, which raises questions about the long-term viability of such payments. Additionally, over the past five years, Nu Skin has experienced a significant annual earnings decline of 14%, which could potentially impact future dividends.
Investors are also looking at the broader picture, where despite a history of increasing its dividends annually by an average rate of 2.7% over the past decade, the combination of declining earnings and a high payout ratio suggests that there may be a risk of a dividend cut in the future.
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