This valuation marks a premium compared to its industry's average Forward P/E of 11.21.
In terms of valuation, Nvidia is currently trading at a Forward P/E ratio of 35.93. Nvidia is holding a Zacks Rank of #5 (Strong Sell) right now. Over the past month, the Zacks Consensus EPS estimate has moved 18.15% lower. The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. This model considers these estimate changes and provides a simple, actionable rating system. Investors can capitalize on this by using the Zacks Rank. Our research shows that these estimate changes are directly correlated with near-term stock prices. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook. Recent revisions tend to reflect the latest near-term business trends. Here is how the Dividend Yield is calculated:ĭividend Yield = (dividend per share)/(price per share).Any recent changes to analyst estimates for Nvidia should also be noted by investors. Often, shareholders rely on dividends as a source of income, so a steady, reliable, and consistently growing dividend is often considered favorable by the investment community. The cash reserves are important because if a company cannot pay a dividend because of an adverse temporary operating environment the company would draw from those reserves, pay the dividend from cash on hand, and keep its shareholders happy until normal operating conditions resume. Normally, if a company pays a dividend to its shareholders, part of the EPS is shared with the shareholders, part of the EPS is deposited as cash reserves, and the rest is designated elsewhere. Dividend income may be treated differently by various types of shareholders, and tax liabilities may change accordingly, but the company issuing a dividend will have had to either pay taxes on the earnings that generated the money to pay the dividend or would have had to acquire the cash in some non-taxable event. Before a company can pay shareholders a dividend, the company must pay taxes on the earnings, and then the shareholders must pay taxes too.ĭividend income is therefore exposed to double taxation. The Dividend chart for Nvidia (NVDA) shows us the per share payout over time.ĭividends are a distribution to shareholders, and they define how much money a company is providing to its shareholders after all taxes and expenses have been paid.
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