Limoneira's (NASDAQ:LMNR) Dividend Will Be $0.075
Limoneira Company's (NASDAQ:LMNR) investors are due to receive a payment of $0.075 per share on 12th of April. This payment means the dividend yield will be 1.6%, which is below the average for the industry.
Check out our latest analysis for Limoneira
Limoneira Doesn't Earn Enough To Cover Its Payments
If it is predictable over a long period, even low dividend yields can be attractive. Despite not generating a profit, Limoneira is still paying a dividend. The company is also yet to generate cash flow, so the dividend sustainability is definitely questionable.
Earnings per share is forecast to rise by 144.9% over the next year. Assuming the dividend continues along recent trends, we think the payout ratio could reach 123%, which probably can't continue without putting some pressure on the balance sheet.
Limoneira Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. The annual payment during the last 10 years was $0.15 in 2014, and the most recent fiscal year payment was $0.30. This means that it has been growing its distributions at 7.2% per annum over that time. Dividends have grown at a reasonable rate over this period, and without any major cuts in the payment over time, we think this is an attractive combination as it provides a nice boost to shareholder returns.
The Company Could Face Some Challenges Growing The Dividend
Investors could be attracted to the stock based on the quality of its payment history. Limoneira has impressed us by growing EPS at 30% per year over the past five years. While the company is not yet turning a profit, it is growing at a good rate. If this trajectory continues and the company can turn a profit soon, it could bode well for the dividend going forward.
Limoneira's Dividend Doesn't Look Sustainable
Overall, it's nice to see a consistent dividend payment, but we think that longer term, the current level of payment might be unsustainable. In the past the payments have been stable, but we think the company is paying out too much for this to continue for the long term. We don't think Limoneira is a great stock to add to your portfolio if income is your focus.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. For example, we've picked out 1 warning sign for Limoneira that investors should know about before committing capital to this stock. 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.
