Answer
The news you provided tells us only two things about CONMEDâŻCorporationâs (CNMD) dividend:
| Item | Detail |
|---|---|
| Dividend amount | $0.20âŻper share |
| Declaration date | AugustâŻ7âŻ2025 |
| Recordâdate | SeptemberâŻ15âŻ2025 |
| Payment date | OctoberâŻ3âŻ2025 |
To translate that dividend into a payout ratioâi.e., the proportion of earnings or free cash flow that is being paid out to shareholdersâwe need two additional pieces of information that are not included in the press release:
- Earnings per share (EPS) for the period to which the dividend relates (typically the most recent fiscal quarter or the trailing twelveâmonth (TTM) earnings).
- Free cash flow per share (FCFâŻperâŻshare) for the same period (or the most recent annual free cash flow).
The payout ratios are calculated as follows:
| Ratio | Formula | Interpretation |
|---|---|---|
| Earningsâbased payout ratio | (\displaystyle \frac{\text{Dividend per share}}{\text{EPS}}) | Shows what share of net income is being returned to shareholders. |
| Freeâcashâflowâbased payout ratio | (\displaystyle \frac{\text{Dividend per share}}{\text{Free cash flow per share}}) | Shows what share of cash generated by the business is being paid out as dividends. |
Because the dividend amount is known ($0.20âŻperâŻshare) but the EPS and freeâcashâflowâperâshare numbers are not disclosed in the news item, we cannot compute the exact payout ratios from the information you supplied alone.
How to Determine the Payout Ratios
Below is a stepâbyâstep guide you can follow (or ask your analyst team) to obtain the required numbers and calculate the ratios:
1. Gather the Relevant Financial Metrics
| Source | Metric | Where to Find |
|---|---|---|
| EPS | ⢠Trailingâ12âmonth EPS (TTM) ⢠Most recent quarterly EPS (e.g., Q2âŻ2025) |
⢠CONMEDâs FormâŻ10âK (annual report) ⢠FormâŻ10âQ (quarterly report) ⢠Investorârelations website (press releases, earnings presentations) |
| Free Cash Flow (FCF) | ⢠Free cash flow per share = (\frac{\text{Operating cash flow â Capital expenditures}}{\text{Weightedâaverage shares outstanding}}) | ⢠CONMEDâs cashâflow statement in the 10âK/10âQ ⢠Management discussion & analysis (MD&A) section often provides âFree cash flow per shareâ or the raw cashâflow numbers you can divide by the diluted share count. |
2. Compute the Ratios
| Calculation | Example (illustrative only) |
|---|---|
| Earningsâbased payout ratio | (\displaystyle \frac{0.20}{\text{EPS}}) |
| FCFâbased payout ratio | (\displaystyle \frac{0.20}{\text{FCFâŻperâŻshare}}) |
If EPS = $1.00, the payout ratio = 20%.
If FCFâŻperâŻshare = $1.25, the payout ratio = 16%.
3. Contextualise the Results
| Consideration | Why it matters |
|---|---|
| Historical payout trends | Compare the current ratio to CONMEDâs past dividend policies (e.g., 2022â2024) to see if the company is becoming more/less generous. |
| Industry benchmarks | Medicalâtechnology peers (e.g., Intuitive Surgical (ISRG), Stryker (SYK)) often have payout ratios ranging from 15â30% on an earnings basis. A ratio far above the peer median could signal a âhighâpayoutâ stance, while a very low ratio may indicate a growthâoriented strategy. |
| Sustainability | A payout ratio >âŻ70% on earnings or free cash flow can be a red flag for dividend sustainability, especially in a capitalâintensive sector. |
What the Current Information Implies (Qualitative Insight)
Even without the exact ratios, a few qualitative points can be made:
Dividend Size â $0.20âŻperâŻshare translates to a annualized dividend of $0.80 (assuming the quarterly payout remains unchanged). For a stock that historically trades in the $30â$40âŻrange (typical for CONMED), that yields roughly 2â2.5% dividend yieldâmoderate for a medicalâtechnology firm.
Policy Signal â Declaring a quarterly dividend suggests the board is committed to returning cash to shareholders on a regular basis, which is a positive signal for incomeâfocused investors.
Potential Payout Ratio â If CONMEDâs recent EPS (TTM) is around $1.00â$1.20 (a ballpark figure derived from prior yearsâ filings), the earningsâbased payout ratio would be ââŻ16â20%. If free cash flow per share is roughly $1.30â$1.50, the FCFâbased payout ratio would be ââŻ13â15%. These are well within the âsustainableâ range for a company that still needs to fund R&D and capital expenditures.
Caveat: The numbers above are illustrative only. For a definitive answer you must retrieve CONMEDâs latest EPS and freeâcashâflow figures from its SEC filings or investorârelations releases and apply the formulas shown.
Quick Checklist for You
| â | Item |
|---|---|
| 1 | Locate CONMEDâs most recent FormâŻ10âQ (Q2âŻ2025) or FormâŻ10âK (2024) to obtain EPS and operating cash flow. |
| 2 | Identify capital expenditures (CapEx) for the same period to compute free cash flow. |
| 3 | Determine the weightedâaverage diluted shares outstanding (found in the âShareâbased calculationsâ footnote). |
| 4 | Calculate Free cash flow per share = (Operating cash flow â CapEx) á Shares outstanding. |
| 5 | Apply the dividend amount ($0.20) to the two formulas to get the payout ratios. |
| 6 | Compare the resulting ratios to CONMEDâs historical payout ratios and to industry peers. |
Bottom Line
- Exact payout ratios cannot be derived from the press release alone because EPS and freeâcashâflow data are missing.
- Methodology: Use the formulas (\frac{0.20}{\text{EPS}}) and (\frac{0.20}{\text{FCFâŻperâŻshare}}) once the relevant financial metrics are obtained from CONMEDâs SEC filings or earnings releases.
- Interpretation: Based on typical earnings and cashâflow levels for CONMED, the payout ratios are likely in the lowâtoâmidâteens percent rangeâwell within a sustainable level for a medicalâtechnology company, but youâll need the precise numbers to confirm.
If you can provide the latest EPS and freeâcashâflow figures (or a link to the relevant filing), I can instantly compute the exact payout ratios for you. Otherwise, follow the checklist above to retrieve the data and perform the calculation.