Evercore Inc. (NYSE:EVR) stock is about to trade ex-dividend in 4 days time. If you purchase the stock on or after the 27th of November, you won't be eligible to receive this dividend, when it is paid on the 13th of December.
Evercore's next dividend payment will be US$0.58 per share. Last year, in total, the company distributed US$2.32 to shareholders. Based on the last year's worth of payments, Evercore has a trailing yield of 3.0% on the current stock price of $77.41. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.
Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Evercore paid out just 24% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
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. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. That's why it's comforting to see Evercore's earnings have been skyrocketing, up 38% per annum for the past five years.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Evercore has delivered 17% dividend growth per year on average over the past ten years. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.
Has Evercore got what it takes to maintain its dividend payments? Companies like Evercore that are growing rapidly and paying out a low fraction of earnings, are usually reinvesting heavily in their business. This strategy can add significant value to shareholders over the long term - as long as it's done without issuing too many new shares. We think this is a pretty attractive combination, and would be interested in investigating Evercore more closely.
Ever wonder what the future holds for Evercore? See what the nine analysts we track are forecasting, with this visualisation of its historical and future estimated earnings and cash flow
A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising dividend stocks with a greater than 2% yield and an upcoming dividend.
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