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Here's What We Like About Lakeland Financial's (NASDAQ:LKFN) Upcoming Dividend

Simply Wall St
·3 mins read

Lakeland Financial Corporation (NASDAQ:LKFN) is about to trade ex-dividend in the next four days. You can purchase shares before the 22nd of October in order to receive the dividend, which the company will pay on the 5th of November.

Lakeland Financial's next dividend payment will be US$0.30 per share, on the back of last year when the company paid a total of US$1.20 to shareholders. Looking at the last 12 months of distributions, Lakeland Financial has a trailing yield of approximately 2.6% on its current stock price of $45.47. If you buy this business for its dividend, you should have an idea of whether Lakeland Financial's dividend is reliable and sustainable. So we need to investigate whether Lakeland Financial can afford its dividend, and if the dividend could grow.

See our latest analysis for Lakeland Financial

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. That's why it's good to see Lakeland Financial paying out a modest 38% of its earnings.

Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

historic-dividend
historic-dividend

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. Fortunately for readers, Lakeland Financial's earnings per share have been growing at 12% 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. In the last 10 years, Lakeland Financial has lifted its dividend by approximately 11% a year on average. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.

Final Takeaway

Is Lakeland Financial an attractive dividend stock, or better left on the shelf? Typically, companies that are growing rapidly and paying out a low fraction of earnings are keeping the profits for reinvestment in the business. This is one of the most attractive investment combinations under this analysis, as it can create substantial value for investors over the long run. We think this is a pretty attractive combination, and would be interested in investigating Lakeland Financial more closely.

In light of that, while Lakeland Financial has an appealing dividend, it's worth knowing the risks involved with this stock. Our analysis shows 2 warning signs for Lakeland Financial that we strongly recommend you have a look at before investing in the company.

If you're in the market for dividend stocks, we recommend checking our list of top dividend stocks with a greater than 2% yield and an upcoming dividend.

This article by Simply Wall St is general in nature. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.