Should you buy ManTech International Corporation (NASDAQ: MANT) for its next 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 about to trade excluding dividend within the next 3 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. Therefore, if you buy ManTech International shares on or after December 2, you will not be eligible to receive the dividend when it is paid on December 17.

The company’s next dividend payment will be US $ 0.38 per share. Last year, in total, the company distributed US $ 1.52 to shareholders. Looking at the last 12 months of distributions, ManTech International has a sliding return of approximately 2.2% on its current price of $ 70.07. Dividends are a major contributor to returns on investment for long-term holders, but only if the dividend continues to be paid. So we need to determine whether ManTech International can afford its dividend and whether the dividend could increase.

Check out our latest analysis for ManTech International

Dividends are generally paid out of company profits. If a company pays more dividends than it made a profit, then the dividend could be unsustainable. ManTech International paid a comfortable 43% of its profits last year. A useful secondary check may be to assess whether ManTech International has generated sufficient free cash flow to pay its dividend. It distributed 34% of its free cash flow as dividends, a comfortable payout level for most companies.

It is encouraging to see that the dividend is covered by both earnings and cash flow. This usually suggests that the dividend is sustainable, as long as profits don’t drop sharply.

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

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Have Profits and Dividends Increased?

Stocks of companies that generate sustainable earnings growth often offer the best dividend prospects because it’s easier to raise the dividend when earnings rise. Investors love dividends, so if profits fall and the dividend is reduced, expect a stock to be sold massively at the same time. 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. .

Most investors will primarily assess a company’s dividend prospects by checking the historical rate of dividend growth. Since our data began 10 years ago, ManTech International has increased its dividend by around 6.1% per year on average. We are happy to see dividends increasing along with earnings over a number of years, which may be a sign that the company intends to share the growth with its shareholders.

The bottom line

From a dividend perspective, should investors buy or avoid ManTech International? 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.

So while ManTech International looks good from a dividend standpoint, it’s still worth being aware of the risks involved in this stock. For example, we have identified 2 warning signs for ManTech International (1 is not going too well with us) you must be aware.

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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