Dicker Data Ltd (ASX: DDR) has kicked off the week with a positive start, announcing an 11 cents per share dividend before the market opened today.
The announcement has driven DDR shares up 4% at the time of writing, with the stock now trading at $10.17 apiece.
The tech distributor is due to report its FY24 earnings at the end of this month. Could this Dicker Data dividend be a signal of what's to come? Let's see.
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Dividend details: What you need to know
The latest dividend is set for payment on 2 September, with the ex-dividend date confirmed for 15 August. Anyone who's on the company's share register by this date qualifies for this payout.
For those holding or considering Dicker Data shares, it's worth nothing a few facts on its dividend.
Looking back over the past 12 months, the Dicker Data dividend is 47 cents per share, equating to a yield of 4.6% at the time of writing.
According to CommSec, consensus expects dividends of 51.3 cents per share in FY25, and 56.5 cents per share the year after.
What this means for investors
For income-focused investors, the Dicker Data dividend yield is comparable to most savings vehicles provided by banks.
But there are two major differences. The first is the payout from this yield is unlikely to change, provided Dicker doesn't lower its dividend payouts from the trailing 47 cents per share.
To put this into perspective, at a trailing yield of 4.6%, a $10,000 investment in Dicker Data shares at the current price would result in $460 of annual passive income.
The second difference is the prospects for capital growth. And with that, analysts are turning positive about Dicker Data's prospects.
Goldman Sachs upgraded the stock to a neutral rating in July. The broker highlighted its operating margins, inventory management, and high free cash flow generation as reasons why. These are positive for the Dicker Data dividend.
It also said Dicker is "in a position to capitalise on market share opportunities as they arise".
Meanwhile, the consensus of analyst estimates rates Dicker Data a moderate buy. This comprises three buys and five holds.
Dicker Data dividend summary
Dicker Data's dividend announcement might underscore what's in store for the company's full-year earnings later this month. To pay dividends, you must first have profits.
With Dicker Data shares up on the dividend news, it is a welcome relief for investors. Shares in the company are trading around 15% lower this year to date.
