Labcorp Holdings (NYSE:LH) Is Due To Pay A Dividend Of $0.72

Labcorp Holdings Inc. (NYSE:LH) will pay a dividend of $0.72 on the 11th of June. This means the dividend yield will be fairly typical at 1.3%.

Our free stock report includes 1 warning sign investors should be aware of before investing in Labcorp Holdings. Read for free now.

Labcorp Holdings' Future Dividend Projections Appear Well Covered By Earnings

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important. However, prior to this announcement, Labcorp Holdings' dividend was comfortably covered by both cash flow and earnings. As a result, a large proportion of what it earned was being reinvested back into the business.

Looking forward, earnings per share is forecast to rise by 76.6% over the next year. If the dividend continues on this path, the payout ratio could be 18% by next year, which we think can be pretty sustainable going forward.

Check out our latest analysis for Labcorp Holdings

Labcorp Holdings Doesn't Have A Long Payment History

The company has maintained a consistent dividend for a few years now, but we would like to see a longer track record before relying on it. The payments haven't really changed that much since 3 years ago. Labcorp Holdings hasn't been paying a dividend for very long, so we wouldn't get to excited about its record of growth just yet.

Labcorp Holdings 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. Labcorp Holdings hasn't seen much change in its earnings per share over the last five years. While growth may be thin on the ground, Labcorp Holdings could always pay out a higher proportion of earnings to increase shareholder returns.

Our Thoughts On Labcorp Holdings' Dividend

Overall, a consistent dividend is a good thing, and we think that Labcorp Holdings has the ability to continue this into the future. The dividend has been at reasonable levels historically, but that hasn't translated into a consistent payment. This looks like it could be a good dividend stock going forward, but we would note that the payout ratio has been at higher levels in the past so it could happen again.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For instance, we've picked out 1 warning sign for Labcorp Holdings that investors should take into consideration. 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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