Lifetime Brands (NASDAQ:LCUT) Has Announced A Dividend Of $0.0425
Lifetime Brands, Inc.'s (NASDAQ:LCUT) investors are due to receive a payment of $0.0425 per share on 15th of February. This means that the annual payment will be 2.0% of the current stock price, which is in line with the average for the industry.
View our latest analysis for Lifetime Brands
Lifetime Brands Is Paying Out More Than It Is Earning
We aren't too impressed by dividend yields unless they can be sustained over time. Even in the absence of profits, Lifetime Brands is paying a dividend. The company is also yet to generate cash flow, so the dividend sustainability is definitely questionable.
The next 12 months is set to see EPS grow by 120.8%. If the dividend continues on its recent course, the payout ratio in 12 months could be 180%, which is a bit high and could start applying pressure to the balance sheet.
Lifetime Brands Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. The dividend has gone from an annual total of $0.10 in 2012 to the most recent total annual payment of $0.17. This implies that the company grew its distributions at a yearly rate of about 5.4% over that duration. Companies like this can be very valuable over the long term, if the decent rate of growth can be maintained.
The Company Could Face Some Challenges Growing The Dividend
Investors could be attracted to the stock based on the quality of its payment history. Lifetime Brands has seen EPS rising for the last five years, at 17% per annum. Even though the company isn't making a profit, strong earnings growth could turn that around in the near future. Assuming the company can post positive net income numbers soon, it could has the potential to be a decent dividend payer.
The Dividend Could Prove To Be Unreliable
Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. We can't deny that the payments have been very stable, but we are a little bit worried about the very high payout ratio. We would be a touch cautious of relying on this stock primarily for the dividend income.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. As an example, we've identified 1 warning sign for Lifetime Brands that you should be aware of before investing. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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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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