American Software Rewards Investors with 30%-Plus Total Returns (AMSWA)
By: Ned Piplovic,
American Software Inc. (NASDAQ:AMSWA) rewarded its shareholders with asset appreciation of nearly 30% over the past year and a 3.4% dividend yield.
The company’s share price growth and its 3.4% dividend yield combined for a total return on shareholder investment of more than 30% in the past 12 months. In addition to the recent benefit to its shareholders, the company has avoided cutting its annual dividend over the past 15 years.
The company’s next ex-dividend date will occur on February 8, 2018, and the pay date follows just a little more than two weeks later, on February 23, 2018.
American Software Incorporated (NASDAQ:AMSWA)
Founded in 1970 and headquartered in Atlanta, Georgia, American Software, Inc. (NASDAQ: AMSWA) develops, markets and supports demand-driven supply chain management and enterprise software solutions. The company operates through three business segments — Supply Chain Management (SCM), Enterprise Resource Planning (ERP) and Information Technology (IT) Consulting. Users of American Software’s products and services are companies in the retail, apparel, footwear, consumer packaged goods, chemicals, oil and gas, life sciences, telecommunications, consumer electronics, industrial products and other manufacturing industries.
The company currently pays a $0.44 annual dividend in quarterly installments of $0.11. At the current share price level, this annual dividend amount is equivalent to a 3.4% forward yield. American Software’s current yield is five times as high as the 0.66% average yield of all companies in the Application Software market segment. The average yield for that market segment rises to 1.51% when including only dividend-paying companies. However, even compared to that average, American Software’s current 3.4% yield is 1.25% higher and it is also 188% higher than the 1.18% average yield of the entire Technology sector.
The company has a record of raising its annual dividend consecutively only for the past two years and has done so at an average growth rate of 3.2% per year. However, the company has not cut its annual dividend in the past 15 years and has raised its annual dividend more than half the time. Over the last decade and a half, American Software enhanced its annual dividend payout to its shareholders at an average growth rate of 4.1% per year. Compounded at this average rate for the past 15 years, the total annual dividend amount nearly doubled.
The company’s share price went through a slow and steady growth stage in the first half of 2017 and then experienced some volatility and a few significant double-digit-percentage swings. Initially, the share price rose almost 20% between January 17, 2017, and June 22, 2017, with only few brief fluctuations. However, after that rise, the share price fell more than 23% in fewer than 60 days and reached its 52-week low of $9.13 on August 11, 2017.
After trading near-bottom levels for approximately three weeks, the share price embarked on a steep uptrend, recovered all its losses by early October and continued to rise another 8.4% towards its 52-week high of $12.98 on November 28, 2017. The share price gained more than 42% between the September 52-week low and the November peak. However, the peak levels did not last long.
Within one week of peaking at the end of November, the share price fell 10% and spent the entire month of December trading below $12.00. The share price resumed its uptrend in January and rose almost 11% to close on January 16, 2018, at $12.95, which is just $0.03 — or 0.02% — below the November peak, 29.7% higher than it was one year earlier and almost 42% above the 52-week low from early August 2017.
The rising dividend income and appreciating asset value have combined to reward American Software investors with significant total returns over the last few years, but especially in the past 12 months. The five-year and three-year total returns came in at 82% and 64%, respectively. However, the total return of more than 32% over the past year was considerably above average.
Dividend increases and dividend decreases, new dividend announcements, dividend suspensions and other dividend changes occur daily. To make sure you don’t miss any important announcements, sign up for our E-mail Alerts. Let us do the hard work of gathering the data and sending the relevant information directly to your inbox.
In addition to E-mail Alerts, you will have access to our powerful dividend research tools. Take a quick video tour of the tools suite.
Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.