Published Mon, 12 Feb 2018 10:08:35 -0500 on Seeking Alpha
Overview – On the surface this dividend is an outlier With a market capitalization of $45.75 million, Digirad Corporation (DRAD) is considered a nano-cap. It is not common to see nano-caps paying a dividend of 9.6%. Nor is it common to see a company in the medical diagnostic testing industry achieving this yield level. So a nano-cap in the medical diagnostic industry paying a 9.6% dividend should raise eyebrows.
Digirad Business Model Digirad defines its footprint in healthcare to include mobile diagnostic imaging, solid-state nuclear imaging, cardiac monitoring, women’s health services and other. They break it out on the income statement into two segments; (1) Services and (2) Product/Product Related.
Services makes up the majority of the revenue for Digirad; 79% of the total revenue through the first 9 months of 2017. Services includes the following three categories; (1) Nuclear and Ultrasound Imaging, (2) Cardiac Event Monitoring Services, and (3) Mobile Healthcare.
The Product segment is broken out into two categories; (1) Diagnostic Imaging and (2) Mobile Device Sales and Services. The Mobile Device Sales and Services (MDSS) business primarily sold Philips branded imaging systems in the upper Midwestern territory of the United States. The agreement with Phillips is set to expire on March 28, 2019. In Q1 2018, Digirad sold the portion of MDSS that provided post warranty contract maintenance services for large diagnostic imaging equipment to Phillips for $8... Read more
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