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LeMaitre Vascular, Inc. (NASDAQ:LMAT) is about to trade ex-dividend in the next 4 days. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. 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. Thus, you can purchase LeMaitre Vascular's shares before the 18th of November in order to receive the dividend, which the company will pay on the 2nd of December.
The company's next dividend payment will be US$0.11 per share. Last year, in total, the company distributed US$0.44 to shareholders. Based on the last year's worth of payments, LeMaitre Vascular has a trailing yield of 0.8% on the current stock price of $54.45. If you buy this business for its dividend, you should have an idea of whether LeMaitre Vascular's dividend is reliable and sustainable. 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 usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. That's why it's good to see LeMaitre Vascular paying out a modest 32% of its earnings. A useful secondary check can be to evaluate whether LeMaitre Vascular generated enough free cash flow to afford its dividend. What's good is that dividends were well covered by free cash flow, with the company paying out 23% of its cash flow last year.
It's positive to see that LeMaitre Vascular'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. It's encouraging to see LeMaitre Vascular has grown its earnings rapidly, up 24% a year for the past five years. Earnings per share have been growing very quickly, and the company is paying out a relatively low percentage of its profit and cash flow. 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.