Dividends can be underrated but they form a large part of investment returns, playing an important role in compounding returns in the long run. The Great Eastern Shipping Company Limited (NSE:GESHIP) has returned to shareholders over the past 10 years, an average dividend yield of 3.00% annually. Should it have a place in your portfolio? Let’s take a look at Great Eastern Shipping in more detail. Check out our latest analysis for Great Eastern Shipping
5 questions I ask before picking a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
- Is it the top 25% annual dividend yield payer?
- Does it consistently pay out dividends without missing a payment of significantly cutting payout?
- Has it increased its dividend per share amount over the past?
- Can it afford to pay the current rate of dividends from its earnings?
- Will it be able to continue to payout at the current rate in the future?
How well does Great Eastern Shipping fit our criteria?
Great Eastern Shipping has a negative payout ratio, which means that it is loss-making, and paying its dividend from its retained earnings.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Not only have dividend payouts from Great Eastern Shipping fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. This means that dividend hunters should probably steer clear of the stock, at least for now until the track record improves.
In terms of its peers, Great Eastern Shipping produces a yield of 2.47%, which is on the low-side for Oil and Gas stocks.Next Steps:
Whilst there are few things you may like about Great Eastern Shipping from a dividend stock perspective, the truth is that overall it probably is not the best choice for a dividend investor. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. Given that this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. Below, I’ve compiled three important factors you should further research:
- Future Outlook: What are well-informed industry analysts predicting for GESHIP’s future growth? Take a look at our free research report of analyst consensus for GESHIP’s outlook.
- Valuation: What is GESHIP worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether GESHIP is currently mispriced by the market.
- Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.