Does DroneShield stock pay dividends?
A man clasps his hands together while he looks upwards and sideways pondering how the Betashares Nasdaq 100 ETF performed in the 2022 financial year
Few ASX shares on the All Ordinaries (ASX: XAO) Index have delivered the kind of returns that DroneShield Ltd (ASX DRO) stock has over the past few months.
Today, the Droneshield share price is trading at $1.44, down 1.03% for the day thus far. But even so, this share price still leaves Droneshield stock with a jaw-dropping year-to-date gain of 277.6% over 2024 so far. Over the past 12 months, this defence share has risen by an even more impressive 524%.
So needless to say, Droneshield investors would be a pretty happy bunch right about now. Check out Droneshield's incredible stock price trajectory for yourself below:
This monstrous rise in value hasn't come unprovoked. Droneshield is a stock that has been growing at breakneck speed. Back in April, the company released a quarterly cash flow report, which revealed Droneshield's revenues for the quarter ending 31 March came in at $16.4 million. That was up a stupendous 925% from the $1.6 million the company reported for the same quarter last year.
So given Droneshield's stunning recent success, many investors might be wondering whether this company pays out a dividend, perhaps even a fully franked one. So today, let's dive into what kind of dividends Droneshield stock pays, or at least, has paid, out.
Will you get dividend income from Droneshield stock?
Well, this won't take long.
Droneshield stock has never paid out a dividend. And it doesn't look like it will, at least on a short-term horizon.
Most companies only start paying dividends when they are comfortably profitable, and with a business model that has reached some sort of maturity. Remember, every dollar that a company forks out in dividend payments is a dollar it can't reinvest into its business.
It was only in the 2023 financial year that Droneshield achieved profitability for the first time. The company reported a net profit of $9.3 million for FY2023, up from a net loss of $900,000 for FY2022.
Right now, the company is clearly prioritising growth, with a $15 million capital raising program recently completed.
If Droneshield continues to grow at this stunning rate, I still wouldn't expect a dividend until it has scaled up to its full potential and is sitting on a comfortable stream of free cash flow with net profits consistently high.
Even so, Droneshield stock owners arguably shouldn't complain too loudly about this lack of dividend income, considering their lucrative capital gains over just the past six months alone.
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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. has positions in and has recommended DroneShield. 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 Scott Phillips.