Do BrainChip shares pay dividends?

Perhaps rather surprisingly, the BrainChip Holdings Ltd (ASX: BRN) share price had a healthy day of gains during Wednesday’s trading session. This ASX All Ords share closed the day up a robust 2.82% at its intraday high of 91 cents a share.

It’s surprising because, in stark contrast, the All Ordinaries Index (ASX: XAO) had an absolute shocker, falling by a nasty 1.54%, just over 6,920 points.

It’s unclear why BrainChip shares had such a strong showing today. There wasn’t any news or announcements out of the ASX artificial intelligence company whatsoever.

But BrainChip has become an ASX share of interest for many investors in recent years. That’s probably thanks to the astronomical gains we saw from this company at the start of the year. On 31 December 2021, BrainChip was asking just 68 cents per share.

But by late January, the company’s share price had rocketed as high as $2.34 – the reigning record high. That was a gain of more than 200% in just a few weeks, certainly enough to draw some attention from investors. Since then, however, the story has been a far less lucrative one.

BrainChip is now down more than 60% from those January highs at the current pricing. But in saying that, BrainChip shares are still up a healthy 12.66% year to date in 2022.

With these eye-catching moves, many investors might be wondering if there are some dividend returns to enjoy from BrainChip shares as well. So do BrainChip shares pay dividends?

Where are BrainChip’s dividends?

Well, the answer to that question is short, but not so sweet: no. BrainChip does not currently pay a dividend. Nor has it ever.

If a company wishes to fund dividend payments, it usually must first be profitable. Doling out cash on dividends would usually be a highly irresponsible action for a company that is losing money on its bottom line.

And with BrainChip, we can see that this company is not even close to being consistently profitable. As my Fool colleague Matthew covered, BrainChip last month reported its half-year earnings for FY22.

This saw BrainChip declare an operating loss of US$8.56 million for the six months to 30 June 2022, down 1% year on year. That works out to be a loss per share of 46 US cents, or 66 cents in our currency.

So if you want a reason why BrainChip doesn’t fund dividend payments, look no further than those metrics.

Now, there’s nothing inherently wrong with a company posting a loss. Many growth shares run losses for years while they build up scale. And in those same earnings, BrainChip did announce revenues of US$4.83 million, up a healthy 529% year on year.

But until BrainChip starts making consistent profits on its bottom line, investors shouldn’t hold their breath for any dividend income.

The post Do BrainChip shares pay dividends? appeared first on The Motley Fool Australia.

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More reading

• Why is the BrainChip share price lagging the ASX 200 on Monday?
• Why are ASX 200 tech shares being hit the hardest on Wednesday?
• Why is the BrainChip share price sinking 8% on Wednesday?
• Here are the top 10 ASX 200 shares today
• Have BrainChip shares been a good investment so far in 2022?

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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