Have you been keeping an eye on Silver Chef Limited’s (ASX:SIV) upcoming dividend of A$0.1 per share payable on the 20 April 2018? Then you only have 5 days left before the stock starts trading ex-dividend on the 05 April 2018. What does this mean for current shareholders and potential investors? Below, I will explain how holding Silver Chef can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. Check out our latest analysis for Silver Chef
How I analyze a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
- Is its annual yield among the top 25% of dividend payers?
- Has it paid dividend every year without dramatically reducing payout in the past?
- Has dividend per share risen in the past couple of years?
- Is its earnings sufficient to payout dividend at the current rate?
- Will it have the ability to keep paying its dividends going forward?
Does Silver Chef pass our checks?
SIV currently pays out twice what it is earning, according to its trailing twelve-month data, which suggests that the dividend is not well-covered by earnings by any means. In the near future, analysts are predicting a more sensible payout ratio of 70.60%, leading to a dividend yield of around 8.77%. EPS is also forecasted to fall to A$0.05 in the upcoming year. The lower EPS on top of a lower payout ratio will lead to a fall in dividend payment moving forward. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. In the case of SIV it has increased its DPS from A$0.12 to A$0.35 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. These are all positive signs of a great, reliable dividend stock. Compared to its peers, Silver Chef produces a yield of 9.00%, which is high for Trade Distributors stocks.
With this in mind, I definitely rank Silver Chef as a strong dividend stock, and makes it worth further research for anyone who likes steady income generation from their portfolio. 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 fundamental aspects you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for SIV’s future growth? Take a look at our free research report of analyst consensus for SIV’s outlook.
- Historical Performance: What has SIV’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.