Should Income Investors Look At Landstar System, Inc. (NASDAQ:LSTR) Before Its Ex-Dividend?

Explore Landstar System's Fair Values from the Community and select yours

Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Landstar System, Inc. (NASDAQ:LSTR) is about to go ex-dividend in just 3 days. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is important as the process of settlement involves a full business day. So if you miss that date, you would not show up on the company's books on the record date. Therefore, if you purchase Landstar System's shares on or after the 19th of August, you won't be eligible to receive the dividend, when it is paid on the 9th of September.

The company's next dividend payment will be US$0.40 per share, on the back of last year when the company paid a total of US$3.60 to shareholders. Based on the last year's worth of payments, Landstar System has a trailing yield of 2.7% on the current stock price of US$131.07. If you buy this business for its dividend, you should have an idea of whether Landstar System's dividend is reliable and sustainable. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

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If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. That's why it's good to see Landstar System paying out a modest 31% of its earnings. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. It distributed 28% of its free cash flow as dividends, a comfortable payout level for most companies.

It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.

See our latest analysis for Landstar System

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.NasdaqGS:LSTR Historic Dividend August 15th 2025

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. So we're not too excited that Landstar System's earnings are down 3.3% a year over the past five years.

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Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the past 10 years, Landstar System has increased its dividend at approximately 29% a year on average.

To Sum It Up

From a dividend perspective, should investors buy or avoid Landstar System? Landstar System has comfortably low cash and profit payout ratios, which may mean the dividend is sustainable even in the face of a sharp decline in earnings per share. Still, we consider declining earnings to be a warning sign. All things considered, we are not particularly enthused about Landstar System from a dividend perspective.

Ever wonder what the future holds for Landstar System? See what the 14 analysts we track are forecasting, with this visualisation of its historical and future estimated earnings and cash flow

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.

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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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