There's A Lot To Like About Utah Medical Products, Inc.'s (NASDAQ:UTMD) Upcoming US$0.28 Dividend
Utah Medical Products, Inc. (NASDAQ:UTMD) stock is about to trade ex-dividend in 2 days time. If you purchase the stock on or after the 12th of March, you won't be eligible to receive this dividend, when it is paid on the 2nd of April.
Utah Medical Products's next dividend payment will be US$0.28 per share, on the back of last year when the company paid a total of US$1.12 to shareholders. Based on the last year's worth of payments, Utah Medical Products stock has a trailing yield of around 1.3% on the current share price of $86. If you buy this business for its dividend, you should have an idea of whether Utah Medical Products's dividend is reliable and sustainable. As a result, readers should always check whether Utah Medical Products has been able to grow its dividends, or if the dividend might be cut.
Check out our latest analysis for Utah Medical Products
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 Utah Medical Products's payout ratio is modest, at just 28% of profit.
Click here to see how much of its profit Utah Medical Products paid out over the last 12 months.
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. With that in mind, we're encouraged by the steady growth at Utah Medical Products, with earnings per share up 5.3% on average over the last five years.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Utah Medical Products has delivered an average of 2.0% per year annual increase in its dividend, based on the past ten years of dividend payments.
The Bottom Line
Has Utah Medical Products got what it takes to maintain its dividend payments? Utah Medical Products has seen its earnings per share grow slowly in recent years, and the company reinvests more than half of its profits in the business, which generally bodes well for its future prospects. Overall, Utah Medical Products looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.
So while Utah Medical Products looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. For example, we've found 2 warning signs for Utah Medical Products (1 is a bit unpleasant!) that deserve your attention before investing in the shares.
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.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
