SLM Corporation (NASDAQ:SLM) will pay a dividend of $0.11 on the 16th of September. Based on this payment, the dividend yield will be 1.9%, which is fairly typical for the industry.
See our latest analysis for SLM
SLM’s Payment Has Solid Earnings Coverage
Unless the payments are sustainable, the dividend yield doesn’t mean too much. Prior to this announcement, SLM’s earnings easily covered the dividend, but free cash flows were negative. In general, we consider cash flow to be more important than earnings, so we would be cautious about relying on the sustainability of this dividend.
The next year is set to see EPS grow by 0.7%. If the dividend continues on this path, the payout ratio could be 13% by next year, which we think can be pretty sustainable going forward.
SLM Doesn’t Have A Long Payment History
It is great to see that SLM has been paying a stable dividend for a number of years now, however we want to be a bit…
