Sustainability Assessment
Insperity’s $0.60 quarterly payout translates to an annual dividend of $2.40 per share, or roughly a 3‑3.2 % yield at today’s roughly $75‑$80 price level. The company’s most recent earnings report (Q2 2025) showed revenue up ~5 % YoY to $1.2 bn and EPS of $2.30, beating consensus. More importantly, free‑cash‑flow (FCF) for the quarter was $45 m, a 20 % increase quarter‑over‑quarter, and the annualized FCF run‑rate now sits around $180 m. The dividend represents about 30‑35 % of trailing twelve‑month FCF, well below the typical 50‑60 % “comfort zone” for dividend‑paying firms. Management also reaffirmed its 2025 guidance, indicating no intention to alter the payout policy. All signs point to a healthy cash‑flow cushion and a modest payout ratio, suggesting the $0.60 quarterly dividend is financially sustainable in the near term.
Trading Implications
From a technical standpoint, NSP is trading just above its 50‑day and 200‑day moving averages, with the 50‑day EMA acting as a near‑term support at ~$71. The RSI sits in the mid‑50s, indicating room for upside without being overbought. Given the dividend yield, the stock is attractive for income‑focused investors, especially on a pull‑back to the $70‑$72 range, which could provide a “buy‑the‑dip” entry with the dividend as a partial downside buffer. Conversely, a breach below the 200‑day MA (~$68) would warrant a re‑evaluation of cash‑flow trends and any potential guidance cuts. Overall, the dividend appears sustainable, making NSP a viable hold for income plus modest capital appreciation, but keep an eye on quarterly cash‑flow reports and any macro‑headwinds to the HR‑services sector.