Our analysis is based on comparing Newtek Business Services Corp. with the following peers – CBIZ, Inc., RE/MAX Holdings, Inc., Ares Management LP and Realogy Holdings Corp. (CBZ-US, RMAX-US, ARES-US and RLGY-US).
Newtek Business Services Corp.’s dividend yield is 8.64 percent and its dividend payout is 96.97 percent. This compares to a peer median dividend yield of 3.76 percent and a payout level of 50.38 percent. This type of dividend performance might make it a good stock for dividend investors. However, the company’s relatively low dividend quality score of 33 out of a possible score of 100 raises questions on the sustainability of its robust payout ratio.
Dividend Quality Overview
- Over the last twelve months (prior to September 30, 2017), NEWT-US paid a medium quality dividend, which represents a yield of 8.43% at the current price.
- Dividends were paid for 2 of the last five years — all of them were also of low quality.
- The ending cash balance, with a dividend coverage of 1.18x, provides a moderate cushion in case of a significant reduction of cash flows in the future.
Quadrant label definitions. Hover to know more
Over the last twelve months (prior to September 30, 2017), NEWT-US paid a medium quality dividend.
The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of -0.94x), investing cash flow (coverage of -1.56x), issuance cash flow (coverage of 3.53x) and twelve-month prior cash (coverage of 1.06x), for a total dividend coverage of 2.18x.
These coverage ratio factors imply that the firm’s net cash inflow from issuance was required (in addition to operating and investment cash) to pay the dividend, which suggests a medium dividend quality.
|Dividend Yield (%)||0||0||0||11.7||11.74||8.64|
|Dividend Payout (%)||0||0||0||53.01||81.38||96.97|
A complete list of metrics and analysis is available on the company page.
Newtek Business Services Corp. is an non-diversified closed-end management investment company, which engages in the provision of wide range of business services and financial products under the Newtek brand to small-and-medium sized business market. It operates through the following segments: Electronic Payment Processing, Managed Technology Solutions, Small Business Finance, All Other, Corporate Activities, and Capco. The Electronic Payment Processing segment markets third party credit card processing and check approval services to the small and medium sized business market under the name of Newtek Merchant Solutions. The Managed Technology Solutions segment offers shared and dedicated web hosting, data storage and backup services, cloud computing plan and related services to the small and medium sized business market. The Small Business Finance segment originates, sells and services loans to qualifying small businesses. The All Other segment includes results from businesses formed from investments made through Capco programs and others which could not be aggregated with other operating segments, including insurance and payroll processing. The Corporate Activities segment implements business strategy, directs marketing, provides technology oversight and guidance, coordinates and integrates activities of the segments, contracts with alliance partners, acquires customer opportunities, and owns its proprietary NewTracker referral system. The Capco segment consists of twelve certified capital companies which invests in small- and medium-sized businesses. The company was founded by Barry Sloane in 1998 and is headquartered in New York, NY.
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