eXp World Holdings announces dividend: An analysis

eXp World Holdings has announced that the company will pay a dividend of $0.05 per share on August 30. With a dividend yield of 1.6%, the value is slightly below the industry average. Although the dividend yield appears low, it can still be attractive, especially if it remains consistent over the years. While eXp World Holdings does not currently report any earnings, the company generates stable free cash flows that comfortably cover the dividend. In this context, cash flows are often more relevant than traditional earnings metrics, which makes us confident in the current dividend situation. Additionally, forecasts predict that earnings per share will increase by 117.4% next year. If the dividend policy remains unchanged, the company could distribute an amount in the next 12 months that exceeds earned income multiple times, potentially putting pressure on the balance sheet. Although there have been no significant dividend cuts in the past three years, this time frame is relatively short in the grand financial scheme. Since 2021, the dividend has risen from $0.16 annually to $0.20, representing an annual growth rate of approximately 7.7%. For investors looking to add this stock to their income portfolio, a longer track record of success might be desirable. The quality trend of dividend payments could attract investors, but one must face the facts: In the past five years, eXp World Holdings' earnings growth has stagnated, which could impair the company's ability to increase payouts annually. In summary, while it is positive that the dividend has not been cut, there are concerns regarding the sustainability of the payments. In the short term, however, the dividend appears reliable, assuming the company continues to generate enough cash to cover it. Nevertheless, it does not rank among the top income-generating stocks. Investors tend to prefer companies with a stable dividend policy. However, there are additional aspects to consider when evaluating the stock's performance. For instance, we have identified two warning signs for eXp World Holdings that investors should take into account. Those who view eXp World Holdings as not an ideal option might consider looking at our selection of the best dividend stocks.