Updated 3/11/25

LeMaitre Vascular (LMAT) is a specialized medical device company that focuses on products designed to treat vascular diseases. With a market cap of around $1.85 billion, this company has carved out a niche by providing life-saving solutions for vascular surgeons. It has grown steadily through acquisitions and organic expansion, making it a strong contender in its field.

For dividend investors, LMAT may not offer sky-high yields, but it does provide consistent and growing payouts. With a solid track record of dividend increases and a strong financial position, it’s a stock worth examining closely. Let’s break down its dividend profile, financial health, valuation, and risks.

Key Dividend Metrics

🔵 Dividend Yield: 0.98% (Forward)
💰 Annual Dividend: $0.80 per share
📈 Dividend Growth (5-Year Average): 9.3%
🔄 Payout Ratio: 33.16% (Comfortable)
📆 Next Dividend Date: March 27, 2025
⚖️ Ex-Dividend Date: March 13, 2025
🏦 Financial Stability: Strong cash reserves with a current ratio of 13.14

Dividend Overview

LMAT isn’t the kind of stock that will make income-seeking investors rich overnight, but it does provide something equally valuable—consistency. At just under 1%, the dividend yield might seem small, but it’s backed by steady growth and a manageable payout ratio of 33.16%.

The company has a long history of increasing dividends, with an average growth rate of 9.3% over the past five years. That’s well above inflation and indicates a commitment to rewarding shareholders.

Another positive is that the dividend is well-covered by earnings and cash flow. With a profit margin of 20.03% and strong free cash flow, the risk of a dividend cut is minimal.

Dividend Growth and Safety

For dividend investors, it’s not just about getting paid—it’s about making sure those payments keep coming. LMAT scores well on both safety and growth potential.

Growth Potential

• Revenue grew 14% year-over-year, giving LMAT a strong foundation for future dividend increases.
• Net income jumped 32%, showing solid profitability that supports long-term payout growth.
• The company holds nearly $300 million in cash, providing a safety net for future dividends.

Safety Metrics

• The 33.16% payout ratio means LMAT is paying out only a third of its earnings as dividends, leaving plenty of room for reinvestment.
• Debt remains under control, with a total debt-to-equity ratio of 55.05%.
• Cash flow is strong, with $44.12 million in operating cash flow and $29.38 million in levered free cash flow, ensuring dividends remain sustainable.

LMAT’s history of dividend increases, combined with strong financials, makes it a reliable choice for long-term income investors.

Chart Analysis

Recent Price Action

LeMaitre Vascular (LMAT) has seen a sharp decline in recent trading sessions, with the stock dropping below both the 50-day and 200-day moving averages. The current price of 81.88 suggests a breakdown from its previous uptrend, marking a notable shift in momentum. The stock had been in a steady uptrend for most of the past year, reaching highs above 100, but recent price action indicates a significant reversal.

Moving Averages and Trend Shift

The 50-day moving average (orange line) had been acting as a support level for much of the stock’s uptrend. However, in recent weeks, the stock fell below this key level and is now trading under the 200-day moving average (blue line). This crossover typically signals a change in trend, often referred to as the death cross, which can indicate further downside if buyers do not step in soon.

The 200-day moving average, which had been steadily rising, is now flattening out. This suggests that the longer-term bullish trend is losing steam. If LMAT fails to reclaim these moving averages quickly, it could struggle to regain upward momentum in the near term.

Volume and Selling Pressure

Volume has spiked noticeably on recent down days, signaling increased selling pressure. When a stock declines on high volume, it suggests strong conviction from sellers rather than just normal market fluctuations. The most recent decline was accompanied by some of the highest volume seen in months, reinforcing the bearish sentiment.

Despite this, there have been moments where buyers attempted to step in, as seen in some green volume spikes. However, those efforts have not been strong enough to reclaim key resistance levels, indicating that demand may still be weak.

Relative Strength Index (RSI) and Momentum

The RSI, shown at the bottom of the chart, has fallen sharply and is now approaching oversold territory. Typically, an RSI below 30 suggests that a stock may be oversold and could be due for a short-term bounce. However, being oversold does not necessarily mean a reversal is imminent—it simply indicates that selling pressure has been extreme.

If the RSI remains low and the stock continues to decline, it could be a sign that selling is not yet exhausted. On the other hand, if RSI begins to recover while price stabilizes, it could hint at a potential relief rally.

Support and Resistance Levels

Looking at the chart, 80 appears to be a key psychological level of support. If the stock holds this level and consolidates, it could prevent further downside. However, if it breaks below 80, the next major area of support could be in the mid-70s, where the stock previously consolidated before its breakout last year.

On the upside, the 200-day moving average near 90 will likely act as a strong resistance level. If LMAT can reclaim that level, it may regain its longer-term bullish trend, but for now, the stock is struggling to find a clear direction.

Analyst Ratings

Recent Downgrades

🔻 Oppenheimer recently downgraded LeMaitre Vascular (LMAT) from outperform to market perform due to valuation concerns. Analysts believe the stock’s price has reached a level that already reflects its current fundamentals, leaving little room for further near-term appreciation.

🔻 Barrington Research also lowered its rating from outperform to market perform. The reasoning was similar—after a strong run-up in the stock price over the past year, analysts felt the valuation was stretched. While the company continues to perform well, they adopted a more cautious stance, suggesting the stock may need to consolidate before resuming an upward trajectory.

Recent Upgrades

📈 Lake Street Capital raised its price target from 105 to 110 while maintaining a buy rating. The upgrade was based on strong financial results and continued growth prospects. Analysts highlighted the company’s ability to deliver solid earnings, reinforcing confidence in its long-term potential.

📈 JMP Securities maintained its market outperform rating and increased its price target from 77 to 100. This upgrade came after a series of strong earnings reports and an optimistic business outlook. Analysts see LMAT as well-positioned for sustained profitability, supporting the case for a higher valuation.

Consensus Price Target

💰 The average 12-month price target for LMAT currently sits at 95.25, based on estimates from multiple research firms. Individual targets range from 75 to 110.

📊 The overall analyst sentiment is moderate buy, reflecting a mix of cautious optimism. While some analysts believe the stock has run up too fast, others see continued upside driven by strong fundamentals.

These differing views highlight the importance of balancing valuation concerns with the company’s long-term growth trajectory when evaluating LMAT as an investment.

Earnings Report Summary

LeMaitre Vascular recently shared its financial results for the fourth quarter and the full year of 2024, and the numbers show a company that’s continuing to grow and strengthen its position in the medical device space. There were some impressive gains in sales, profitability, and cash flow, along with a notable dividend increase and a new share repurchase program.

Fourth Quarter Highlights

The company reported $55.7 million in sales for the fourth quarter, marking a 14 percent increase from the same period last year. This growth was fueled by strong demand for grafts, carotid shunts, and catheters, with sales in the Asia-Pacific region jumping 21 percent, Europe and the Middle East up 18 percent, and the Americas seeing a 12 percent boost.

Margins were also on the rise. The gross margin improved to 69.3 percent, thanks to better pricing and efficiency in manufacturing. Operating income hit $12.9 million, up 26 percent from last year, and the operating margin came in at a solid 23 percent.

Earnings per share were $0.49, which is a 30 percent increase from the prior year’s quarter. Meanwhile, cash reserves surged by $175.8 million, bringing the total cash position to $299.7 million—a big jump that gives the company plenty of financial flexibility.

Full Year 2024 Highlights

For the full year, sales totaled $219.86 million, climbing from $193.48 million in 2023. Net income followed suit, rising to $44.04 million, compared to $30.11 million the previous year. Earnings per share saw similar growth, with diluted EPS coming in at $1.93, up from $1.34 in 2023.

Key Developments

One of the standout announcements was the 25 percent increase in the quarterly dividend, bringing it up to $0.20 per share. That’s set to be paid out on March 27, 2025, to shareholders who are on record as of March 13, 2025.

The company also issued $172.5 million in convertible senior notes due in 2030, providing additional capital for corporate expenses and business growth.

On top of that, the board gave the green light for a $75 million share repurchase program, allowing LeMaitre to buy back shares over the next two years.

Overall, these numbers paint a picture of a company that’s firing on all cylinders—growing its business, improving profitability, and making moves to reward shareholders.

Financial Health and Stability

A company’s ability to pay and grow dividends depends on its financial strength. LMAT appears well-positioned for the long run.

• A profit margin of 20.03% and an operating margin of 23.07% suggest strong pricing power and efficiency.
• The company has more cash ($299.72 million) than debt ($185.68 million), reducing financial risk.
• Return on equity sits at 13.87%, a healthy indicator of effective capital use.

One thing to keep an eye on is the debt-to-equity ratio, which has risen slightly. While not a major concern, investors should watch for any continued increase, especially if the company takes on more debt for acquisitions.

Valuation and Stock Performance

LMAT has performed well in the market, but it’s trading at a premium. With a trailing price-to-earnings (P/E) ratio of 42.45 and a forward P/E of 36.63, it’s more expensive than many dividend stocks.

Current Valuation Metrics

• The price-to-sales ratio of 8.49 is higher than historical averages, reflecting strong investor demand.
• The enterprise value-to-EBITDA ratio of 25.98 suggests the stock isn’t cheap but is in line with healthcare industry peers.
• The stock has moved between $62.39 and $109.58 over the past year, showing a solid upward trend.

Despite its premium valuation, LMAT has been a strong performer. The stock currently trades below its 50-day moving average ($95.82) and 200-day moving average ($90.91), suggesting it may be in a temporary consolidation phase.

Risks and Considerations

No stock is without risk, and LMAT is no exception. While the fundamentals are strong, there are a few things investors should consider.

Valuation Risk

• The stock’s valuation is high, and if earnings growth slows, the multiple could compress, leading to potential downside.
• The price-to-sales and enterprise value-to-EBITDA ratios suggest the stock is fully valued at current levels.

Competitive and Regulatory Risks

• The medical device industry is heavily regulated, and any new compliance requirements could impact profitability.
• Larger competitors could potentially pressure LMAT’s market share, although its niche focus helps provide a buffer.

Market Sentiment and Volatility

• Even though LMAT has a lower beta of 0.88, meaning it’s less volatile than the broader market, its stock price has still been subject to swings.
• High-valuation stocks tend to be more sensitive to changes in investor sentiment, particularly during broader market downturns.

Final Thoughts

LeMaitre Vascular is a solid dividend growth stock with a well-covered and steadily increasing payout. The yield of 0.98% isn’t the highest, but the 9.3% average annual dividend growth makes up for it. Strong earnings, a healthy balance sheet, and a conservative payout ratio all point to continued stability.

That said, the stock’s valuation is something to be mindful of. It’s not cheap, and any slowdown in growth could impact the price. However, for long-term investors looking for reliable, growing income, LMAT remains an interesting option.

With its commitment to dividend increases, strong financials, and stable cash flow, LMAT offers a blend of income and growth that could appeal to dividend-focused investors willing to hold through market fluctuations.