On the 20 April 2018, Silver Chef Limited (ASX:SIV) will be paying shareholders an upcoming dividend amount of A$0.1 per share. However, investors must have bought the company’s stock before 05 April 2018 in order to qualify for the payment. That means you have only 3 days left! Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? Let’s take a look at Silver Chef’s most recent financial data to examine its dividend characteristics in more detail. See our latest analysis for Silver Chef
5 checks you should do on 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-paying companies?
- Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
- Has the amount of dividend per share grown over the past?
- Can it afford to pay the current rate of dividends from its earnings?
- Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
Does Silver Chef pass our checks?
Silver Chef has a trailing twelve-month payout ratio of more than 200% of earnings, meaning that the dividend is predominantly funded by retained earnings. However, going forward, analysts expect SIV’s payout to fall into a more sustainable range of 70.60% of its earnings, which leads to a dividend yield of 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’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. 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. This is an impressive feat, which makes SIV a true dividend rockstar. Relative to peers, Silver Chef has a yield of 9.00%, which is high for Trade Distributors stocks.
Keeping in mind the dividend characteristics above, Silver Chef is definitely worth considering for investors looking to build a dedicated income 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 key aspects you should look at:
- 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.