Hamilton Lane Incorporated (NASDAQ:HLNE) Looks Like A Good Stock, And It's Going Ex-Dividend Soon
Hamilton Lane Incorporated (NASDAQ:HLNE) stock is about to trade ex-dividend in 4 days. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Accordingly, Hamilton Lane investors that purchase the stock on or after the 14th of June will not receive the dividend, which will be paid on the 7th of July.
The company's upcoming dividend is US$0.45 a share, following on from the last 12 months, when the company distributed a total of US$1.60 per share to shareholders. Based on the last year's worth of payments, Hamilton Lane stock has a trailing yield of around 2.3% on the current share price of $76.45. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.
View our latest analysis for Hamilton Lane
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Hamilton Lane is paying out an acceptable 53% of its profit, a common payout level among most companies.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. It's encouraging to see Hamilton Lane has grown its earnings rapidly, up 25% a year for the past five years.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Hamilton Lane has delivered an average of 17% per year annual increase in its dividend, based on the past six years of dividend payments. It's exciting to see that both earnings and dividends per share have grown rapidly over the past few years.
To Sum It Up
Should investors buy Hamilton Lane for the upcoming dividend? Earnings per share are growing at an attractive rate, and Hamilton Lane is paying out a bit over half its profits. In summary, Hamilton Lane appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.
While it's tempting to invest in Hamilton Lane for the dividends alone, you should always be mindful of the risks involved. For example, we've found 3 warning signs for Hamilton Lane that we recommend you consider before investing in the business.
Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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