Why Nvidia Should Raise Its Dividend

Nvidia's (NASDAQ: NVDA) dividend yield, an afterthought for most investors, is currently sitting at 0.06%. That is partly due to a stock price that has climbed faster than the company's dividend payments. On that score, the company hasn't increased its dividend in over two years. As the company's profits have climbed on the back of strong demand for advanced graphics chips and data center systems, the dividend payout ratio has dropped to less than 5%.

Here are a few reasons the company should consider returning more income to shareholders.

Nvidia's profit margin improved significantly in recent years as the mix of revenue shifted to data center chips and high-end graphics processing units (GPUs) for gamers that command steep selling prices.

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Source Fool.com