Recent dividend payer
Expedia (EXPE) started paying dividends in 2010. Since then, it has paid dividends every quarter and has consistently increased dividend payout since 2012. Rivals Priceline (PCLN), TripAdvisor (TRIP), and Ctrip.com (CTRP) don’t pay dividends.
EXPE has a current dividend yield of 0.97%. That’s much lower than the technology industry’s dividend yield of 3% and the S&P 500’s (SPY) dividend yield of 2.3%.
Cash dividend ratio
EXPE’s cash dividend ratio stands at a strong 9x at the end of 3Q15, indicating its ability to sustain dividend payouts. The ratio is calculated as cash flows over dividends paid and measures the ability of the company to pay dividends. A ratio of less than 1 indicates dividend payouts higher than the company’s cash flows, which may be difficult to sustain in the future.
Can dividend payouts increase?
EXPE is the only online travel player to pay a dividend to its investors. It has also consistently increased dividend payouts. But recently, EXPE has allocated more capital toward repurchasing shares. Given Expedia’s increasing earnings and history of dividend growth, investors should watch for possible increases in dividends.