On the Fri 29 Sep 2017, Chemtrade Logistics Income Fund (TSX:CHE.UN) will be paying shareholders an upcoming dividend amount of $0.1 per share. However, investors must have bought the company’s stock before Tue 29 Aug 2017 in order to qualify for the payment. That means you have only 3 days left! Should you diversify into CHE.UN and boost your portfolio income stream? Well, keep on reading because today, I’m going to look at the latest data and analyze the stock and its dividend property in further detail.
What is the ex-dividend date?
If you purchase a stock on or after its ex-dividend date, you will not receive the next dividend payment. Instead, the seller gets the dividend. If you purchase before the ex-dividend date, you get the dividend.
Is Chemtrade Logistics Income Fund (CHE.UN) a good dividend stock?Chemtrade Logistics Income Fund’s payout ratio is the first thing I want to look at to assess the strength of it’s dividend yield.
Payout ratio is a measure of the portion of a company’s earnings paid out to shareholders as a dividend. So a payout ratio of 50% means that shareholders receive 50c for every $1 the company earns. Likewise a payout ratio of 150% means the company is paying out more than the profit it earns, usually funded from its cash reserves or debt.The company currently pays out 165% of its earnings as a dividend, meaning the dividend is not sufficiently covered by earnings. Looking forward, analysts expect dividends per share to be around $0.909 and EPS to increase to $0.71. This means shareholders should be concerned with the company’s ability to continue paying with an expected future payout ratio of 128%. View our latest analysis for Chemtrade Logistics Income Fund
In addition to the payout ratio, the payout consistency is a significant consideration when assessing the quality of CHE.UN’s dividend.If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. The reality facing CHE.UN investors is that whilst it has continued to pay shareholders dividend, there has not been any increase in the level of dividends paid in the past decade.
CHE.UN’s yield sits at 6.5%, which is high for a materials stock.
What this means for you:
Are you a shareholder? If CHE.UN is in your portfolio for cash-generating reasons, there may be better alternatives out there.Depending on your portfolio composition, it may be worth exploring other dividend stocks to increase diversification, or even look at high-growth stocks to complement your steady income stocks.
Are you a potential investor? Taking all the above into account, Chemtrade Logistics Income Fund is a complicated pick for dividend investors given that there are a couple of positive things about it as well as negative.However, if you are not strictly just a dividend investor, CHE.UN could still offer some interesting investment opportunities.As always, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment.If you’re still interest in the company, I recommend you take a look at our
latest FREE analysis to explore what investment opportunities Chemtrade Logistics Income Fund may offer. If you are looking for great dividend payers I recommend you also take a look at our list of Dividend Rock Stars.