Lifetime Brands' (NASDAQ:LCUT) Dividend Will Be $0.0425

The board of Lifetime Brands, Inc. (NASDAQ:LCUT) has announced that it will pay a dividend on the 15th of February, with investors receiving $0.0425 per share. Based on this payment, the dividend yield will be 2.4%, which is fairly typical for the industry.

View our latest analysis for Lifetime Brands

Lifetime Brands Is Paying Out More Than It Is Earning

While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible. Even though Lifetime Brands is not generating a profit, it is still paying a dividend. Along with this, it is also not generating free cash flows, which raises concerns about the sustainability of the dividend.

The next 12 months is set to see EPS grow by 111.5%. Assuming the dividend continues along recent trends, we think the payout ratio could get very high, which probably can't continue without starting to put some pressure on the balance sheet.

Lifetime Brands Has A Solid Track Record

The company has an extended history of paying stable dividends. The annual payment during the last 10 years was $0.10 in 2012, and the most recent fiscal year payment was $0.17. This means that it has been growing its distributions at 5.4% per annum over that time. Companies like this can be very valuable over the long term, if the decent rate of growth can be maintained.

The Company Could Face Some Challenges Growing The Dividend

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. It's encouraging to see that Lifetime Brands has been growing its earnings per share at 17% a year over the past five years. Unprofitable companies aren't normally our pick for a dividend stock, but we like the growth that we have been seeing. As long as the company becomes profitable soon, it is on a trajectory that could see it being a solid dividend payer.

The Dividend Could Prove To Be Unreliable

In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about Lifetime Brands' payments, as there could be some issues with sustaining them into the future. Although they have been consistent in the past, we think the payments are a little high to be sustained. We don't think Lifetime Brands is a great stock to add to your portfolio if income is your focus.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. As an example, we've identified 1 warning sign for Lifetime Brands that you should be aware of before investing. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

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