ManTech International Corporation The stock (NASDAQ: MANT) is about to trade ex-dividend in four days. Typically, the ex-dividend date is one business day prior to the record date which is the date a company determines which shareholders are eligible to receive a dividend. It is important to know the ex-dividend date because any transaction in the share must have been settled by the registration date at the latest. This means that you will have to buy the shares of ManTech International by September 9 to receive the dividend, which will be paid on September 24.
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. Based on last year’s payouts, ManTech International has a rolling 2.0% return on the current share price of $ 77.94. We love to see companies pay a dividend, but it’s also important to make sure that laying the golden eggs is not going to kill our goose that lays the golden eggs! 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 usually paid out of the company’s profits, so if a company pays more than it earned, its dividend is usually at risk of being reduced. ManTech International paid a comfortable 43% of its profits last year. Having said that, even very profitable companies can sometimes not generate enough cash to pay the dividend, which is why we always need to check if the dividend is covered by the cash flow. Fortunately, she has only paid out 37% of her free cash flow in the past year.
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 here to view the company’s payout ratio, as well as analysts’ estimates of its future dividends.
Have profits and dividends increased?
Companies with consistently rising earnings per share usually make the best dividend-paying stocks because they generally find it easier to raise dividends per share. If business goes into recession and the dividend is reduced, the company could experience a sharp drop in value. Luckily for readers, ManTech International’s earnings per share have grown 19% per year over the past five years. The company managed to increase its profits at a rapid rate, while reinvesting most of the profits back into the company. This will make it easier to fund future growth efforts and we think this is an attractive combination – plus the dividend can always be increased later.
Most investors 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 alongside earnings over multiple years, which may be a sign that the company intends to share the growth with its shareholders.
Should investors buy ManTech International for the next dividend? ManTech International has grown its profits at a rapid pace and has a cautiously low payout ratio, which implies that it is reinvesting heavily in its business; a sterling combination. ManTech International looks strong on this analysis overall, and we would certainly consider taking a closer look.
With this in mind, an essential part of in-depth stock research is being aware of the risks stocks currently face. Our analysis shows 1 warning sign for ManTech International and you should be aware of this before buying any stocks.
A common investment mistake is to buy the first interesting stock you see. Here you will find a list of promising dividend paying stocks with a yield above 2% and an upcoming dividend.
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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 shares 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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