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LeMaitre Vascular, Inc. (NASDAQ:LMAT) is about to trade ex-dividend in the next four days. You can purchase shares before the 8th of March in order to receive the dividend, which the company will pay on the 25th of March.
LeMaitre Vascular's next dividend payment will be US$0.11 per share, on the back of last year when the company paid a total of US$0.38 to shareholders. Last year's total dividend payments show that LeMaitre Vascular has a trailing yield of 0.9% on the current share price of $51.38. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.
Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Fortunately LeMaitre Vascular's payout ratio is modest, at just 36% of profit.
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 business enters a downturn and the dividend is cut, the company could see its value fall precipitously. Fortunately for readers, LeMaitre Vascular's earnings per share have been growing at 19% a year for the past five years. The company has managed to grow earnings at a rapid rate, while reinvesting most of the profits within the business. Fast-growing businesses that are reinvesting heavily are enticing from a dividend perspective, especially since they can often increase the payout ratio later.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the past 10 years, LeMaitre Vascular has increased its dividend at approximately 19% a year on average. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.
The Bottom Line
Should investors buy LeMaitre Vascular for the upcoming dividend? When companies are growing rapidly and retaining a majority of the profits within the business, it's usually a sign that reinvesting earnings creates more value than paying dividends to shareholders. This is one of the most attractive investment combinations under this analysis, as it can create substantial value for investors over the long run. Overall, LeMaitre Vascular looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.
While it's tempting to invest in LeMaitre Vascular for the dividends alone, you should always be mindful of the risks involved. Every company has risks, and we've spotted 2 warning signs for LeMaitre Vascular you should know about.
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.
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