Lifetime Brands, Inc. (NASDAQ:LCUT) will pay a dividend of US$0.043 on the 15th of August. This payment means the dividend yield will be 1.5%, which is below the average for the industry.
Lifetime Brands' Dividend Is Well Covered By Earnings
Even a low dividend yield can be attractive if it is sustained for years on end. However, Lifetime Brands' earnings easily cover the dividend. This means that most of its earnings are being retained to grow the business.
Looking forward, earnings per share is forecast to rise by 82.9% over the next year. Assuming the dividend continues along recent trends, we think the payout ratio could be 11% by next year, which is in a pretty sustainable range.
Lifetime Brands Has A Solid Track Record
The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. The dividend has gone from US$0.10 in 2012 to the most recent annual payment of US$0.17. This implies that the company grew its distributions at a yearly rate of about 5.4% over that duration. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.
Dividend Growth May Be Hard To Come By
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. However, things aren't all that rosy. It's not great to see that Lifetime Brands' earnings per share has fallen at approximately 9.0% per year over the past five years. A modest decline in earnings isn't great, and it makes it quite unlikely that the dividend will grow in the future unless that trend can be reversed. Earnings are forecast to grow over the next 12 months and if that happens we could still be a little bit cautious until it becomes a pattern.
Our Thoughts On Lifetime Brands' Dividend
Overall, a consistent dividend is a good thing, and we think that Lifetime Brands has the ability to continue this into the future. The earnings coverage is acceptable for now, but with earnings on the decline we would definitely keep an eye on the payout ratio. The dividend looks okay, but there have been some issues in the past, so we would be a little bit cautious.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Just as an example, we've come across 3 warning signs for Lifetime Brands you should be aware of, and 1 of them is a bit concerning. Is Lifetime Brands not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
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