Is it smart to buy ManTech International Corporation (NASDAQ: MANT) before it becomes ex-dividend?

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Regular readers will know we love our dividends at Simply Wall St, which is why it’s exciting to see International ManTech Company (NASDAQ: MANT) is set to trade ex-dividend within the next three days. The ex-dividend date occurs one day before the record date, which is the day on which shareholders must be on the books of the company to receive a dividend. The ex-dividend date is important because any share transaction must have been settled before the registration date to be eligible for a dividend. This means that investors who buy ManTech International shares from December 2 will not receive the dividend, which will be paid on December 17.

The company’s upcoming dividend is US $ 0.38 per share, continuing the past 12 months when the company has distributed a total of US $ 1.52 per share to shareholders. Based on the value of last year’s payouts, ManTech International stock has a sliding return of approximately 2.2% on the current stock price of $ 70.07. If you are buying this company for its dividend, you should know if ManTech International’s dividend is reliable and sustainable. You have to see if the dividend is covered by profits and if it increases.

Dividends are usually paid out of the company’s profits, so if a company pays more than what it earns, its dividend is usually at risk of being reduced. That’s why it’s good to see ManTech International donate a modest 43% of its profits. Having said that, even very profitable companies can sometimes not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by the cash flow. Fortunately, she has only paid out 34% of her free cash flow in the past year.

It is positive to see that ManTech International’s dividend is covered by both earnings and cash flow, as this is usually a sign that the dividend is sustainable, and a lower payout ratio usually suggests a larger margin. security before the dividend is cut.

Click on here to see the company’s payout ratio, as well as analysts’ estimates of its future dividends.

NasdaqGS: MANT Historic dividend November 27, 2021

Have Profits and Dividends Increased?

Companies with strong growth prospects generally make the best dividend payers because dividends are easier to grow when earnings per share improve. If business goes into recession and the dividend is reduced, the business could experience a sharp drop in value. This is why it is heartwarming to see ManTech International’s revenues soar, increasing by 20% per year over the past five years. Earnings per share have grown very rapidly, and the company pays out a relatively small percentage of its earnings and cash flow. Firms with rising profits and low payout ratios are often the best long-term dividend-paying stocks because the firm can both increase profits and increase the percentage of profit it pays out, essentially multiplying the dividend. .

Many investors will assess a company’s dividend performance by evaluating how much dividend payments have changed over time. ManTech International has generated an average annual increase of 6.1% per annum in its dividend, based on dividend payments over the past 10 years. It’s encouraging to see the company raising its dividends as profits rise, suggesting at least some corporate interest in rewarding shareholders.

The bottom line

Does ManTech International have what it takes to maintain its dividend payments? ManTech International has grown its profits at a rapid rate and has a cautiously low payout ratio, which implies that it is reinvesting heavily in its business; a sterling combination. It is a promising combination that should mark this company worthy of further attention.

Although it is tempting to invest in ManTech International purely for dividends, you should always be aware of the risks involved. To help you, we have discovered 2 warning signs for ManTech International (1 is a concern!) Which you should know before buying the shares.

A common investment mistake is to buy the first interesting stock you see. Here you can find a list of promising dividend-paying stocks with a yield above 2% and a future dividend.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.

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