Zimmer Biomet Holdings' (NYSE:ZBH) Dividend Will Be $0.24

Zimmer Biomet Holdings, Inc.'s (NYSE:ZBH) investors are due to receive a payment of $0.24 per share on 31st of July. This payment means the dividend yield will be 1.0%, which is below the average for the industry.

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Zimmer Biomet Holdings' Projected Earnings Seem Likely To Cover Future Distributions

If it is predictable over a long period, even low dividend yields can be attractive. Before making this announcement, Zimmer Biomet Holdings was easily earning enough to cover the dividend. This means that most of its earnings are being retained to grow the business.

Over the next year, EPS is forecast to expand by 50.5%. Assuming the dividend continues along recent trends, we think the payout ratio could be 14% by next year, which is in a pretty sustainable range.

Check out our latest analysis for Zimmer Biomet Holdings

Zimmer Biomet Holdings Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. The dividend has gone from an annual total of $0.88 in 2015 to the most recent total annual payment of $0.96. Dividend payments have been growing, but very slowly over the period. Although we can't deny that the dividend has been remarkably stable in the past, the growth has been pretty muted.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. It's encouraging to see that Zimmer Biomet Holdings has been growing its earnings per share at 20% a year over the past five years. A low payout ratio gives the company a lot of flexibility, and growing earnings also make it very easy for it to grow the dividend.

Zimmer Biomet Holdings Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think Zimmer Biomet Holdings might even raise payments in the future. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. For example, we've picked out 1 warning sign for Zimmer Biomet Holdings that investors should know about before committing capital to this stock. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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