Herman Miller Inc (NASDAQ:MLHR): Ex-Dividend Is In 3 Days, Should You Buy?

Shares of Herman Miller Inc (NASDAQ:MLHR) will begin trading ex-dividend in 3 days. To qualify for the dividend check of $0.18 per share, investors must have owned the shares prior to 31 May 2018, which is the last day the company's management will finalize their list of shareholders to which they will send dividend payments. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Herman Miller's latest financial data to analyse its dividend characteristics. View our latest analysis for Herman Miller

5 checks you should use to assess a dividend stock

When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:

• Is it paying an annual yield above 75% of dividend payers?
• Does it consistently pay out dividends without missing a payment of significantly cutting payout?
• Has dividend per share risen in the past couple of years?
• Can it afford to pay the current rate of dividends from its earnings?
• Will it be able to continue to payout at the current rate in the future?

Does Herman Miller pass our checks?

Herman Miller has a trailing twelve-month payout ratio of 32.71%, which means that the dividend is covered by earnings. However, going forward, analysts expect MLHR's payout to fall to 26.66% of its earnings, which leads to a dividend yield of around 2.42%. However, EPS should increase to $2.49, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If there is one thing that you want to be reliable in your life, it's dividend stocks and their constant income stream. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Investors have seen reductions in the dividend per share in the past, although, it has picked up again. Relative to peers, Herman Miller generates a yield of 2.20%, which is on the low-side for Commercial Services stocks.

Next Steps:

Taking into account the dividend metrics, Herman Miller ticks most of the boxes as a strong dividend investment, putting it in my list of top dividend payers. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. I've put together three important factors you should further research:

1. Future Outlook: What are well-informed industry analysts predicting for MLHR’s future growth? Take a look at our free research report of analyst consensus for MLHR’s outlook.
2. Valuation: What is MLHR worth today? Even if the stock is a cash cow, it's not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether MLHR is currently mispriced by the market.
3. Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.