Appen shares may be at a 5-year low, but their dividend yield has never been higher

Appen’s dividend is worth a lot more than it used to be these days…

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Key points

  • As a WAAAX share, Appen used to be known as a hot ASX growth share 
  • But the company has been facing hard times of late and has suffered significant share price falls 
  • But this cloud has a silver lining when it comes to dividends... 

It would be a safe bet that the Appen Ltd (ASX: APX) share price has not been a favourite amongst most ASX investors in recent times. This former ASX tech darling has certainly had a painful fall back to earth in recent months. A year ago, Appen was priced at $15.64. In August 2020, it was asking over $40 a share. Today? Appen is currently at $6.69, down a nasty 40% in 2022 alone so far.

The human annotated dataset company has been struggling with uncertainty in its field, which has led to guidance downgrades and a savage earnings multiple compression from investors as a result.

As Appen shares have fallen, its dividend yield has been rising…

But it hasn’t been all bad news for investors. As we covered earlier this month, Appen has been consistently raising its dividend behind the scenes in recent years, even as the company faces the woes discussed above. In 2017, when the company was last facing a share price with a ‘6’ in front of it, it doled out a total of 6 cents in dividends per share.

In 2021, the company paid out 20 cents per share, a good 67% increase on 2017’s payouts. This has helped push Appen’s dividend yield to record highs. A dividend yield is a function of a company’s raw dividends per share, and its share price. Thus, a lower share price combined with rising dividends per share is a recipe for a higher dividend yield. And that is exactly what’s been happening with Appen.

So on current pricing, Appen’s 10 cents per share in dividends gives the company a dividend yield of 1.52%. That’s likely close to the highest dividend yield new investors have ever seen in front of the Appen share price. Appen’s recent and painful share price fall certainly has this silver lining to consider

At the current Appen share price, this ASX 200 tech share has a market capitalisation of $827.9 million, with a price-to-earnings (P/E) ratio of 21.98. 

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Appen Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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