Artisan Partners Asset Management Inc. (NYSE:APAM) stock is about to trade ex-dividend in four days. Ex-dividend means that investors that purchase the stock on or after the 11th of February will not receive this dividend, which will be paid on the 26th of February.
Artisan Partners Asset Management’s next dividend payment will be US$1.28 per share. Last year, in total, the company distributed US$3.39 to shareholders. Calculating the last year’s worth of payments shows that Artisan Partners Asset Management has a trailing yield of 6.4% on the current share price of $53.25. 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! So we need to investigate whether Artisan Partners Asset Management can afford its dividend, and if the dividend could grow.
Check out our latest analysis for Artisan Partners Asset Management
If a company pays out more in dividends than it earned, then the dividend might become unsustainable – hardly an ideal situation. It paid out 81% of its earnings as dividends last year, which is not unreasonable, but limits reinvestment in the business and leaves the dividend vulnerable to a business downturn. It could become a concern if earnings started to decline.
Generally speaking, the lower a company’s payout ratios, the more resilient its dividend usually is.
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 earnings fall far enough, the company could be forced to cut its dividend. For this reason, we’re glad to see Artisan Partners Asset Management’s earnings per share have risen 16% per annum 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. Artisan Partners Asset Management has delivered 8.9% dividend growth per year on average over the past eight years. It’s encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.
From a dividend perspective, should investors buy or avoid Artisan Partners Asset Management? Earnings per share are growing nicely, and Artisan Partners Asset Management is paying out a percentage of its earnings that is around the average for dividend-paying stocks. Artisan Partners Asset Management ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.
In light of that, while Artisan Partners Asset Management has an appealing dividend, it’s worth knowing the risks involved with this stock. For example – Artisan Partners Asset Management has 3 warning signs we think you should be aware of.
We wouldn’t recommend just buying the first dividend stock you see, though. Here’s a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.
When trading Artisan Partners Asset Management or any other investment, use the platform considered by many to be the Professional’s Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account.
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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.