Utah Medical Products' (NASDAQ:UTMD) Dividend Will Be $0.30

The board of Utah Medical Products, Inc. (NASDAQ:UTMD) has announced that it will pay a dividend on the 4th of October, with investors receiving $0.30 per share. This payment means that the dividend yield will be 1.8%, which is around the industry average.

Check out our latest analysis for Utah Medical Products

Utah Medical Products' Payment Has Solid Earnings Coverage

Unless the payments are sustainable, the dividend yield doesn't mean too much. However, Utah Medical Products' earnings easily cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

EPS is set to fall by 0.4% over the next 12 months if recent trends continue. Assuming the dividend continues along recent trends, we believe the payout ratio could be 28%, which we are pretty comfortable with and we think is feasible on an earnings basis.

Utah Medical Products Has A Solid Track Record

The company has an extended history of paying stable dividends. The annual payment during the last 10 years was $1.00 in 2014, and the most recent fiscal year payment was $1.20. This means that it has been growing its distributions at 1.8% per annum over that time. While the consistency in the dividend payments is impressive, we think the relatively slow rate of growth is less attractive.

Utah Medical Products May Find It Hard To Grow The Dividend

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. However, initial appearances might be deceiving. Utah Medical Products hasn't seen much change in its earnings per share over the last five years.

In Summary

Overall, a consistent dividend is a good thing, and we think that Utah Medical Products has the ability to continue this into the future. With shrinking earnings, the company may see some issues maintaining the dividend even though they look pretty sustainable for now. The dividend looks okay, but there have been some issues in the past, so we would be a little bit cautious.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. See if management have their own wealth at stake, by checking insider shareholdings in Utah Medical Products stock. 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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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.

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