Printed on June thirtieth, 2025 by Bob Ciura
Palantir Applied sciences (PLTR) is likely one of the market’s premier progress shares. In simply the previous three years, Palantir inventory has produced returns of greater than 1,200%.
As the corporate’s income progress has exploded and it has develop into worthwhile, it’s pure for buyers to surprise if a dividend fee is likely to be on the horizon.
Whether or not an organization pays a dividend depends upon many components. Hundreds of publicly-traded firms pay dividends to shareholders, and a few have maintained lengthy histories of elevating their dividends yearly.
For instance, the Dividend Aristocrats are a choose group of 69 shares within the S&P 500 which have raised their dividends for 25+ years in a row.
You’ll be able to obtain an Excel spreadsheet of all Dividend Aristocrats (with metrics that matter, equivalent to price-to-earnings ratios and dividend yields) by clicking the hyperlink beneath:
Disclaimer: Positive Dividend just isn’t affiliated with S&P International in any method. S&P International owns and maintains The Dividend Aristocrats Index. The knowledge on this article and downloadable spreadsheet is predicated on Positive Dividend’s personal evaluation, abstract, and evaluation of the S&P 500 Dividend Aristocrats ETF (NOBL) and different sources, and is supposed to assist particular person buyers higher perceive this ETF and the index upon which it’s based mostly. Not one of the data on this article or spreadsheet is official information from S&P International. Seek the advice of S&P International for official data.
Then again, different firms don’t pay a dividend proper now and may not for a really very long time (or ever).
Traders within the firm could wish to know if Palantir will ever pay a dividend to shareholders. This text will try to reply that query.
Enterprise Overview
Palantir had its preliminary public providing on September 30, 2020. The inventory opened up at $10 earlier than ending the day at $9.50. Nonetheless, the inventory has carried out fairly nicely up to now 5 years, and now trades above $130 per share.
At present, Palantir has a market capitalization above $300 billion, making it a mega-cap inventory.
Palantir was based in 2003, partly by well-known enterprise capitalist Peter Thiel. Thiel has been the brains, cash or each behind a few of the know-how sectors most profitable endeavors, together with Meta Manufacturers (META) and PayPal (PYPL).
Palantir is likely one of the main suppliers of software program platforms for the intelligence neighborhood. The corporate has 4 principal platforms.
The Palantir Gotham platform can establish patterns hidden in datasets, which vary from alerts intelligence sources to studies with confidential informants. Gotham is utilized by counter-terrorism analysts throughout the U.S. Intelligence Neighborhood and U.S. Division of Protection.
Palantir Foundry creates a central working system for an organization’s information which permits customers to combine and analyze information wanted in a single centrally positioned place.
AIP permits clients to automate nearly all areas of their companies. Its Workflow Builder can assemble AI apps, actions, and brokers.
Lastly, Apollo homes software program deployment instruments. Options embrace SaaS, safety, compliance, and extra.
Progress Prospects
The corporate’s platforms can be utilized to deal with all kinds of industries, starting from protection to well being care to meals to power. This doesn’t restrict Palantir capability to draw clients to just some areas of the financial system.
With a deep pool of potential clients, Palantir isn’t any area of interest enterprise.
The necessity for companies and organizations to have the ability to safely safe its information in a central location can also be a necessity and Palantir is ready to scale their platform to fulfill their wants.
Palantir has translated these progress prospects into outcomes.
On Might fifth, the corporate reported first-quarter monetary outcomes. For the quarter, income of $883.85 million beat analyst expectations by $21.72 million. Adjusted earnings-per-share of $0.13 was in-line with estimates.
U.S. income elevated 55% year-over-year, together with 71% year-over-year progress in U.S. business income.
Supply: Investor Presentation
The corporate has additionally been busy profitable new enterprise since going public. Palantir closed on 139 offers within the first quarter price not less than $1 million, 51 of which have been price not less than $5 million.
Palantir can also be starting to search out extra of a world presence. The corporate can proceed to develop its enterprise by increasing its space of operations.
Aggressive Benefits
Palantir has a number of benefits that units it aside from the competitors. First, Palantir’s refined platform will help firms optimize their enterprise and discover methods to take away prices from the system. This will help enhance working efficiency whereas lowering bills.
The corporate’s merchandise are additionally in excessive demand amongst navy clients. Whereas considerably controversial amongst sure buyers, the corporate’s platforms have been confirmed to work in these areas which makes them a preferred alternative amongst the intelligence and protection communities.
As soon as belief has been gained, there could possibly be switching prices related to these companies selecting one other vendor.
Palantir additionally has the good thing about rising clients whereas additionally lowering in reliance on just some clients.
Supply: Investor Presentation
Palantir generated GAAP internet earnings of $214 million together with GAAP earnings-per-share of $0.08, which means the corporate has reached profitability.
The corporate additionally raised steerage, now anticipating 2025 income of $3.89 billion to $3.902 billion. Palantir additionally expects free money circulation of $1.6 billion to $1.8 billion.
In the meantime, the corporate has the benefit of serious money reserves. As of the tip of its most up-to-date quarter, Palantir had a complete of $5.43 billion of money and money equivalents, and marketable securities on its steadiness sheet.
Present belongings whole $6.28 billion, in contrast with present liabilities of $976.4 million, indicating very robust liquidity. Only a few younger public firms have such an unlimited sum of liquid belongings out there, with out important long-term debt.
Such a robust steadiness sheet will increase the possibility that the corporate may pay a dividend sooner or later.
Lastly, Palantir continues to be run by the identical management as when the corporate was based. Thiel stays chairman and his handpicked CEO Alex Karp has been in place since 2004.
Will Palantir Ever Pay A Dividend?
Palantir is a uncommon firm that has proven robust income and earnings progress since its IPO, together with an abundance of money on its steadiness sheet.
Firms seeking to pay a dividend must be worthwhile with robust steadiness sheets with the intention to distribute a dividend.
On the floor, Palantir meets these necessities, which means it may theoretically pay a dividend. Nonetheless, there are different concerns for firms nonetheless of their progress stage, equivalent to Palantir.
Primarily, progress firms have to reinvest money circulation again into their companies, to remain on the expansion monitor. Certainly, Palantir continues to take a position the overwhelming majority of its proceeds again into the enterprise.
Working bills rose 22% within the first quarter, year-over-year. This was because of the firm rising its gross sales and market, analysis and improvement and basic and administrative budgets to a extra cheap stage for a rising and increasing firm.
With excessive bills comes a low stage of income, which impacts any potential dividend want Palantir could have. Although the corporate was worthwhile in its first quarter, Palantir is barely anticipated to earn $0.37 per share this 12 months.
Earnings-per-share are anticipated to develop by 16% subsequent 12 months to $0.43. This leaves comparatively little room to pay a dividend.
For instance, ff the corporate needed to allocate half of subsequent 12 months’s earnings-per-share to a dividend, then shareholders may obtain a quarterly dividend of roughly $0.05. This equates to a yield of simply 0.1% on the present worth, which doubtless wouldn’t have a lot attraction for earnings buyers.
On the similar time, buyers aren’t flocking to Palantir due to its capability to throw off earnings. The younger firm is already worthwhile and seeing an unbelievable progress fee. Any use of capital to pay a paltry dividend could be capital that couldn’t be spent elsewhere.
Palantir is a lot better off preserving capital to reinvest in its enterprise. The money on the steadiness sheet can at all times be used to make an acquisition or assist develop the enterprise in another method.
Due to this fact, we consider it could possibly be not less than 5 to 10 years earlier than Palantir is ready the place initiating a dividend is sensible.
Remaining Ideas
After a gradual begin, there is no such thing as a doubting Palantir has been a wonderful funding following its IPO. The inventory has rocketed increased in simply the previous few years, producing a lifetime of returns in a comparatively quick time.
The corporate produced GAAP income in its first quarter and confirmed that income progress stays very excessive. Palantir additionally has a number of progress in entrance of it and has a number of aggressive benefits that ought to propel it increased.
Traders in search of a progress inventory, and don’t thoughts the controversies relating to the corporate’s platforms, may do nicely proudly owning shares of Palantir. What they doubtless received’t see is a dividend anytime quickly.
For shareholders of Palantir, they’re in all probability extra excited in regards to the whole return prospects than a small dividend.
Extra Studying
See the articles beneath for an evaluation of whether or not different shares that at present don’t pay dividends will at some point pay a dividend:
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