Be Sure To Check Out Universal Logistics Holdings, Inc. (NASDAQ:ULH) Before It Goes Ex-Dividend
Universal Logistics Holdings, Inc. (NASDAQ:ULH) is about to trade ex-dividend in the next 4 days. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a dividend. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Therefore, if you purchase Universal Logistics Holdings' shares on or after the 1st of March, you won't be eligible to receive the dividend, when it is paid on the 1st of April.
The company's next dividend payment will be US$0.105 per share, and in the last 12 months, the company paid a total of US$0.42 per share. Based on the last year's worth of payments, Universal Logistics Holdings has a trailing yield of 1.3% on the current stock price of US$33.35. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to investigate whether Universal Logistics Holdings can afford its dividend, and if the dividend could grow.
View our latest analysis for Universal Logistics Holdings
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. Universal Logistics Holdings has a low and conservative payout ratio of just 12% of its income after tax.
Click here to see how much of its profit Universal Logistics Holdings paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings fall far enough, the company could be forced to cut its dividend. Fortunately for readers, Universal Logistics Holdings's earnings per share have been growing at 14% a year for the past five years. Earnings per share have been growing rapidly and the company is retaining a majority of its earnings 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.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Universal Logistics Holdings has delivered an average of 4.1% per year annual increase in its dividend, based on the past 10 years of dividend payments. Earnings per share have been growing much quicker than dividends, potentially because Universal Logistics Holdings is keeping back more of its profits to grow the business.
To Sum It Up
Has Universal Logistics Holdings got what it takes to maintain its dividend payments? 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. Perhaps even more importantly - this can sometimes signal management is focused on the long term future of the business. Overall, Universal Logistics Holdings looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.
On that note, you'll want to research what risks Universal Logistics Holdings is facing. Every company has risks, and we've spotted 2 warning signs for Universal Logistics Holdings you should know about.
A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield dividend stocks.
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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.
