![]() Nvidia previously spent $1.6 billion to buy back shares in 2018, when the stock traded at an attractive valuation of around 20 times earnings. Management did not repurchase any shares between 20 as the stock's valuation soared. ![]() The recent $2 billion buyback at these high valuation levels is questionable. After spending $2 billion to repurchase shares in the recent quarter, they currently have another $5 billion left on their share repurchase authorization through the end of December 2022. Since August 2004, management has spent over $7 billion repurchasing shares. In November 2012, we initiated a quarterly dividend payment of 0.075 per share. ![]() The total spent on dividends last year was $399 million, but Nvidia has spent far more on share repurchases. In addition, investors and others can view NVIDIA videos on YouTube. Nvidia can certainly afford to double its payout to at least 10%. NVDA Cash Dividend Payout Ratio data by YCharts. But over the last five years, Nvidia's free cash flow has increased more than 400%, while the dividend has only increased 25%. Other companies that design or manufacture chips, such as Apple, Intel, and Broadcom, pay out anywhere from 14% to 58% of their free cash flow in dividends. These companies face just as much competition for their products, yet they far outspend Nvidia in returning cash to shareholders through dividends. ![]()
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