Lazard Ltd (NYSE:LAZ) stock is about to trade ex-dividend in 3 days time. Investors can purchase shares before the 2nd of August in order to be eligible for this dividend, which will be paid on the 16th of August.
Lazard's upcoming dividend is US$0.47 a share, following on from the last 12 months, when the company distributed a total of US$2.38 per share to shareholders. Looking at the last 12 months of distributions, Lazard has a trailing yield of approximately 6.2% on its current stock price of $38.6. If you buy this business for its dividend, you should have an idea of whether Lazard's dividend is reliable and sustainable. So we need to check whether the dividend payments are covered, and if earnings are growing.
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. Lazard is paying out an acceptable 54% of its profit, a common payout level among most companies.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
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. That's why it's comforting to see Lazard's earnings have been skyrocketing, up 20% per annum for the past five years.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Since the start of our data, 10 years ago, Lazard has lifted its dividend by approximately 20% a year on average. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.
Should investors buy Lazard for the upcoming dividend? Earnings per share are growing nicely, and Lazard is paying out a percentage of its earnings that is around the average for dividend-paying stocks. In summary, Lazard appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.
Ever wonder what the future holds for Lazard? See what the nine analysts we track are forecasting, with this visualisation of its historical and future estimated earnings and cash flow
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.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.