Can GROW's EPS rebound based on past trends?

U.S. Global Investors (GROW) faces significant challenges for an EPS rebound based on past trends:

1. Recent Performance: The most recent data shows a substantial decline in EPS, with a year-over-year growth rate of -111.11% and a diluted EPS of -$0.01 as of 2025 Q2. This indicates a severe contraction in earnings, which is a critical indicator of the company's profitability.

grow eps, eps growth rate(1)

Last Price($)	Last Change%	Diluted Eps Yoy Growth%	Diluted EPS($)	Report End Date	Fiscal Date	Report Period
2.12	-4.78%	-111.11	-0.01	20241231	20250630	2025Q2

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GROWU.S. Global Investors

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2. Dividend Sustainability Concerns: The company has a history of paying dividends, with the latest being $0.0075 per share, offering a dividend yield of 4%. However, the dividend is currently unsustainable. GROW was previously paying out 244% of its earnings and not generating any free cash flows. This high payout ratio and lack of free cash flow are red flags for the sustainability of the dividend.
3. Earnings Decline Despite Dividend Growth: The dividend has shown a compound annual growth rate (CAGR) of approximately 4.1% since 2015. However, this is accompanied by a decline in earnings per share over the last five years. Earnings per share has fallen by 20% during this period, which could make it difficult for the company to support its dividend payments.
4. Potential Future Scenarios: Assuming the dividend continues along recent trends, the payout ratio could reach 319%, which could put the dividend under pressure if earnings do not improve. This suggests that without a rebound in EPS, the dividend may be at risk of being cut or becoming unsustainable.
5. Conclusion: Given the current financial metrics and the company's history, it is challenging to envision an EPS rebound that would support the dividend at its current level. The company would need to significantly improve its earnings generation or reduce its dividend payout to ensure sustainability. Investors should monitor the situation closely, considering the potential risks associated with GROW's EPS trends and dividend sustainability.