Artisan Partners (NYSE:APAM) Asset Management is planning to increase its dividend to $0.65 on November 30th, which will result in a substantial yield of 7.3% for its shareholders. The firm's strategy has been marked by a focus on cash returns, with the high payout ratio demonstrating this commitment. A significant portion of earnings, along with 81% of free cash flows, are returned to investors.
Despite the cash-intensive nature of this approach, the company's expected EPS growth rate of 8.1% indicates a possibility for sustainability. This is notable considering the firm's history of dividend instability, which includes at least one cut and a modest compound annual growth rate (CAGR) of 4.5% since 2013.
While the enhanced dividend yield may be attractive to some investors, the company's history of dividend inconsistency could potentially limit its appeal for those looking for stable income investments. This move by Artisan Partners Asset Management underscores the firm's ongoing prioritization of cash returns, even in light of previous challenges with maintaining a consistent dividend payout.
InvestingPro Insights
Artisan Partners Asset Management's financial profile showcases a compelling blend of strength and growth, as evidenced by the InvestingPro data. With a market cap of 2900M USD and a P/E ratio of 11.94, the company presents an attractive investment proposition. It has shown a strong return on assets, standing at 20.67% for the last twelve months as of Q3 2023, indicating efficient use of its resources. Furthermore, the company's 1 Week Price Total Return as of the end of August 2023 was a significant 12.57%, reflecting a robust short-term performance.
InvestingPro Tips underline the company's high earnings quality, with free cash flow exceeding net income, and its ability to yield a high return on invested capital. The company's stock price movements can be quite volatile, which investors should bear in mind. Notably, Artisan Partners Asset Management has maintained its dividend payments for 11 consecutive years, demonstrating a commitment to returning capital to shareholders. While there are over 15 additional useful tips available in the InvestingPro platform, these selected ones provide a snapshot of the company's financial health and potential.
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