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Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Artisan Partners Asset Management Inc. (NYSE:APAM) is about to trade ex-dividend in the next four 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. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least one business day to settle. Accordingly, Artisan Partners Asset Management investors that purchase the stock on or after the 16th of May will not receive the dividend, which will be paid on the 30th of May.
The company's next dividend payment will be US$0.68 per share. Last year, in total, the company distributed US$3.55 to shareholders. Looking at the last 12 months of distributions, Artisan Partners Asset Management has a trailing yield of approximately 8.7% on its current stock price of US$40.82. 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. As a result, readers should always check whether Artisan Partners Asset Management has been able to grow its dividends, or if the dividend might be cut.
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 84% 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.
View our latest analysis for Artisan Partners Asset Management
Have Earnings And Dividends Been Growing?
Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. 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 Artisan Partners Asset Management, with earnings per share up 4.9% on average over the last five years.