Lazard Inc's Dividend Analysis
Insights into Lazard Inc's Upcoming Dividend and Financial Health
Lazard Inc (NYSE:LAZ) recently announced a dividend of $0.5 per share, payable on 2024-02-23, with the ex-dividend date set for 2024-02-09. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Lazard Inc's dividend performance and assess its sustainability.
What Does Lazard Inc Do?
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Lazard has a storied history that can be traced back to 1848. The company's revenue is nearly equally split between financial advisory, such as acquisition and restructuring advisory, and asset management. The company's asset management business is primarily equities (over 80% of assets under management), has an international focus, and is geared toward institutional clients. By geography, the company earns approximately 60% of revenue in the Americas, 35% in EMEA, and 5% in Asia-Pacific. Lazard has offices across more than 20 countries and over 3,000 employees.
A Glimpse at Lazard Inc's Dividend History
Lazard Inc has maintained a consistent dividend payment record since 2005, with dividends currently distributed on a quarterly basis. The stock is listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 19 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Lazard Inc's Dividend Yield and Growth
As of today, Lazard Inc currently has a 12-month trailing dividend yield of 5.16% and a 12-month forward dividend yield of 5.16%, suggesting an expectation of same dividend payments over the next 12 months. Over the past three years, Lazard Inc's annual dividend growth rate was 1.60%, which increased to 3.50% per year over a five-year horizon, and stands at 9.10% over the past decade.
Based on Lazard Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Lazard Inc stock as of today is approximately 6.13%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. As of 2023-12-31, Lazard Inc's dividend payout ratio is 2.89, which may suggest that the company's dividend may not be sustainable. Lazard Inc's profitability rank, which is 8 out of 10, suggests good profitability prospects. The company has also reported positive net income for each year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
Robust growth metrics are essential for the sustainability of dividends. Lazard Inc's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors. However, Lazard Inc's revenue and earnings growth rates, at approximately 7.00% and 11.00% per year on average, respectively, underperform approximately 50% of global competitors. The company's 5-year EBITDA growth rate of 11.20% also underperforms against about half of global competitors.
Next Steps
In conclusion, while Lazard Inc has a commendable history of dividend payments and growth, the current payout ratio may raise concerns about sustainability. However, the company's strong profitability rank and positive net income history provide some reassurance. Future dividend sustainability will likely depend on Lazard Inc's ability to maintain or improve its growth metrics. Value investors should continue to monitor these indicators to make informed decisions. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
