Advertisement

Artisan Partners Asset Management Inc. (NYSE:APAM) Passed Our Checks, And It's About To Pay A US$0.90 Dividend

Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Artisan Partners Asset Management Inc. (NYSE:APAM) is about to go ex-dividend in just 4 days. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. Meaning, you will need to purchase Artisan Partners Asset Management's shares before the 13th of February to receive the dividend, which will be paid on the 28th of February.

The company's next dividend payment will be US$0.90 per share, on the back of last year when the company paid a total of US$2.82 to shareholders. Calculating the last year's worth of payments shows that Artisan Partners Asset Management has a trailing yield of 7.5% on the current share price of $37.38. If you buy this business for its dividend, you should have an idea of whether Artisan Partners Asset Management's dividend is reliable and sustainable. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

View our latest analysis for Artisan Partners Asset Management

Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Artisan Partners Asset Management is paying out an acceptable 75% of its profit, a common payout level among most companies.

Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

historic-dividend
historic-dividend

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. It's encouraging to see Artisan Partners Asset Management has grown its earnings rapidly, up 32% a year for the past five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Artisan Partners Asset Management has delivered an average of 5.6% per year annual increase in its dividend, based on the past nine years of dividend payments. It's good to see both earnings and the dividend have improved - although the former has been rising much quicker than the latter, possibly due to the company reinvesting more of its profits in growth.

Final Takeaway

From a dividend perspective, should investors buy or avoid Artisan Partners Asset Management? Earnings per share are growing nicely, and Artisan Partners Asset Management is paying out a percentage of its earnings that is around the average for dividend-paying stocks. Artisan Partners Asset Management ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.

On that note, you'll want to research what risks Artisan Partners Asset Management is facing. To help with this, we've discovered 2 warning signs for Artisan Partners Asset Management (1 is a bit unpleasant!) that you ought to be aware of before buying the shares.

A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield dividend stocks.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an 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 account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here