Embecta Corp. (NASDAQ:EMBC) has announced that it will pay a dividend of $0.15 per share on the 13th of September. The dividend yield will be 4.1% based on this payment which is still above the industry average.
View our latest analysis for Embecta
Embecta’s Payment Has Solid Earnings Coverage
A big dividend yield for a few years doesn’t mean much if it can’t be sustained. Based on the last dividend, Embecta is earning enough to cover the payment, but then it makes up 253% of cash flows. While the company may be more focused on returning cash to shareholders than growing the business at this time, we think that a cash payout ratio this high might expose the dividend to being cut if the business ran into some challenges.
The next year is set to see EPS grow by 104.9%. If the dividend continues along recent trends, we estimate the payout ratio will be 24%, which is in the range that makes us comfortable with the sustainability of the…
