Standex international company (NYSE:SXI) The stock is set to trade ex-dividend in three days. The ex-dividend date is one business day before the record date, which is the latest date by which shareholders must be present on the books of the company to be eligible for payment of a dividend. The ex-dividend date is an important date to know because any purchase of shares made on or after this date may mean late settlement which does not appear on the record date. This means that you will have to buy the shares of Standex International before May 10 to receive the dividend, which will be paid on May 25.
The company’s next dividend payment will be $0.26 per share, and over the past 12 months the company has paid a total of $1.04 per share. Calculating the value of last year’s payouts shows that Standex International has a 1.1% return on the current share price of $94.4. We love to see companies pay out a dividend, but it’s also important to make sure that laying the golden eggs doesn’t kill our golden hen! We need to see if the dividend is covered by earnings and if it increases.
Check out our latest analysis for Standex International
Dividends are usually paid out of company profits, so if a company pays out more than it has earned, its dividend is usually at risk of being reduced. Standex International paid out a comfortable 25% of its profit last year. Still, cash flow is even more important than earnings in evaluating a dividend, so we need to see if the company has generated enough cash to pay its distribution. It paid out 18% of its free cash flow as dividends last year, which is conservative.
It is encouraging to see that the dividend is covered by both earnings and cash flow. This generally suggests that the dividend is sustainable, as long as earnings don’t drop precipitously.
Click here to see the company’s payout ratio, as well as analysts’ estimates of its future dividends.
Have earnings and dividends increased?
Stocks with stable earnings can still be attractive dividend payers, but it’s important to be more conservative in your approach and demand a greater margin of safety when it comes to dividend sustainability. If business goes into a recession and the dividend is cut, the company could see its value drop precipitously. It is not encouraging to see that Standex International’s profits have indeed been stable over the past five years. It’s better than seeing them fall, sure, but over the long term, all the best dividend-paying stocks have the potential to significantly increase their earnings per share.
Many investors will gauge a company’s dividend yield by evaluating how much dividend payouts have changed over time. Since our data began 10 years ago, Standex International has increased its dividend by around 16% per year on average.
Does Standex International have what it takes to maintain its dividend payments? While it’s not great to see earnings per share actually stable over the 10-year period we audited, at least the payout ratios are low and conservative. To sum up, Standex International seems correct on this analysis, even if it does not seem like a remarkable opportunity.
With this in mind, an essential part of thorough stock research is to be aware of all the risks stocks currently face. In terms of investment risks, we have identified 1 warning sign with Standex International and understanding them should be part of your investment process.
A common investment mistake is to buy the first good stock you see. Here you can find a complete list of high yielding dividend stocks.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.