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It looks like Haverty Furniture Companies, Inc. (NYSE:HVT) is about to go ex-dividend in the next 4 days. The ex-dividend date occurs one day before the record date which is the day on which shareholders need to be on the company's books in order 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 Haverty Furniture Companies' shares on or after the 27th of November, you won't be eligible to receive the dividend, when it is paid on the 13th of December.
The company's next dividend payment will be US$1.30 per share, on the back of last year when the company paid a total of US$2.20 to shareholders. Based on the last year's worth of payments, Haverty Furniture Companies stock has a trailing yield of around 6.9% on the current share price of $31.74. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! As a result, readers should always check whether Haverty Furniture Companies has been able to grow its dividends, or if the dividend might be cut.
View our latest analysis for Haverty Furniture Companies
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Fortunately Haverty Furniture Companies's payout ratio is modest, at just 29% of profit. A useful secondary check can be to evaluate whether Haverty Furniture Companies generated enough free cash flow to afford its dividend. It distributed 47% of its free cash flow as dividends, a comfortable payout level for most companies.
It's positive to see that Haverty Furniture Companies's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
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. That's why it's comforting to see Haverty Furniture Companies's earnings have been skyrocketing, up 32% per annum for the past five years. Haverty Furniture Companies is paying out less than half its earnings and cash flow, while simultaneously growing earnings per share at a rapid clip. Companies with growing earnings and low payout ratios are often the best long-term dividend stocks, as the company can both grow its earnings and increase the percentage of earnings that it pays out, essentially multiplying the dividend.