There's A Lot To Like About Artisan Partners Asset Management's (NYSE:APAM) Upcoming US$0.61 Dividend
Readers hoping to buy Artisan Partners Asset Management Inc. (NYSE:APAM) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. 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. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. This means that investors who purchase Artisan Partners Asset Management's shares on or after the 16th of August will not receive the dividend, which will be paid on the 31st of August.
The company's upcoming dividend is US$0.61 a share, following on from the last 12 months, when the company distributed a total of US$2.57 per share to shareholders. Based on the last year's worth of payments, Artisan Partners Asset Management has a trailing yield of 6.7% on the current stock price of $38.16. If you buy this business for its dividend, you should have an idea of whether Artisan Partners Asset Management's dividend is reliable and sustainable. So we need to check whether the dividend payments are covered, and if earnings are growing.
See our latest analysis for Artisan Partners Asset Management
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. Its dividend payout ratio is 76% of profit, which means the company is paying out a majority of its earnings. The relatively limited profit reinvestment could slow the rate of future earnings growth. We'd be concerned if earnings began to decline.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
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. That's why it's comforting to see Artisan Partners Asset Management's earnings have been skyrocketing, up 29% per annum for the past five years.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Artisan Partners Asset Management has delivered an average of 4.1% per year annual increase in its dividend, based on the past 10 years of dividend payments. It's good to see both earnings and the dividend have improved - although the former has been rising much quicker than the latter, possibly due to the company reinvesting more of its profits in growth.
The Bottom Line
Is Artisan Partners Asset Management an attractive dividend stock, or better left on the shelf? Artisan Partners Asset Management has an acceptable payout ratio and its earnings per share have been improving at a decent rate. Overall, Artisan Partners Asset Management 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 Artisan Partners Asset Management for the dividends alone, you should always be mindful of the risks involved. For example - Artisan Partners Asset Management has 1 warning sign we think you should be aware of.
Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are 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.
