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Why You Might Be Interested In LeMaitre Vascular, Inc. (NASDAQ:LMAT) For Its Upcoming Dividend

Simply Wall St
·3 min read

It looks like LeMaitre Vascular, Inc. (NASDAQ:LMAT) is about to go ex-dividend in the next 4 days. This means that investors who purchase shares on or after the 26th of August will not receive the dividend, which will be paid on the 10th of September.

LeMaitre Vascular's next dividend payment will be US$0.095 per share, on the back of last year when the company paid a total of US$0.38 to shareholders. Based on the last year's worth of payments, LeMaitre Vascular has a trailing yield of 1.3% on the current stock price of $29.95. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to investigate whether LeMaitre Vascular can afford its dividend, and if the dividend could grow.

View our latest analysis for LeMaitre Vascular

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. LeMaitre Vascular paid out a comfortable 44% of its profit last year. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. Over the last year it paid out 54% of its free cash flow as dividends, within the usual range for most companies.

It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

historic-dividend
historic-dividend

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 earnings fall far enough, the company could be forced to cut its dividend. It's encouraging to see LeMaitre Vascular has grown its earnings rapidly, up 28% a year for the past five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Since the start of our data, nine years ago, LeMaitre Vascular has lifted its dividend by 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? From a dividend perspective, we're encouraged to see that earnings per share have been growing, the company is paying out less than half of its earnings, and a bit over half its free cash flow. Overall we think this is an attractive combination and worthy of further research.

In light of that, while LeMaitre Vascular has an appealing dividend, it's worth knowing the risks involved with this stock. Our analysis shows 1 warning sign for LeMaitre Vascular and you should be aware of it before buying any shares.

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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.