Attention dividend hunters! AllianceBernstein Holding LP. (NYSE:AB) will be distributing its dividend of $0.73 per share on the 17 May 2018, and will start trading ex-dividend in 3 days time on the 04 May 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into AllianceBernstein Holding’s latest financial data to analyse its dividend attributes. Check out our latest analysis for AllianceBernstein Holding
How I analyze a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
- Is their annual yield among the top 25% of dividend payers?
- Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
- Has dividend per share risen in the past couple of years?
- Does earnings amply cover its dividend payments?
- Will the company be able to keep paying dividend based on the future earnings growth?
How does AllianceBernstein Holding fare?The company currently pays out 110.05% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is not well-covered by its earnings. In the near future, analysts are predicting a payout ratio of 100.32%, leading to a dividend yield of around 10.00%. Furthermore, EPS should increase to $2.51. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Not only have dividend payouts from AllianceBernstein Holding fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. These characteristics do not bode well for income investors seeking reliable stream of dividends. Relative to peers, AllianceBernstein Holding has a yield of 8.55%, which is high for Capital Markets stocks.
Now you know to keep in mind the reason why investors should be careful investing in AllianceBernstein Holding for the dividend. On the other hand, if you are not strictly just a dividend investor, the stock could still be offering some interesting investment opportunities. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Below, I’ve compiled three important factors you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for AB’s future growth? Take a look at our free research report of analyst consensus for AB’s outlook.
- Valuation: What is AB 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 AB 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.